Why India’s $1.5 T direct-to-consumer market has come of age? (original) (raw)

India’s direct-to-consumer (D2C) brands are increasingly paying rent to win trust. In one of the clearest signs that India’s digital-first consumer market is moving beyond discounts, influencer-led discovery and rapid customer acquisition, D2C companies leased nearly 595,000 sq ft of retail space in H1 2026 alone, accounting for 18 per cent of India’s total retail leasing activity, up sharply from 8 per cent a year earlier.

A report by Strategic Growth Advisors titled ‘The Pulse 2026’ saysthat the India D2C market is entering a more mature phase where authenticity, long-term consumer relationships and product credibility matter more than online visibility and scale-at-all-costs growth.

The shift reflects how brands are prioritising omni-channel expansion and repeat purchases as rising marketing costs, tighter venture funding and more demanding consumers reshape the country’s $1.5-trillion retail opportunity.

The transition is unfolding even as India’s beauty and personal care market is projected to grow from 24billioninFY25to24 billion in FY25 to 24billioninFY25to40-45 billion by FY30, with online penetration expected to rise from 6 per cent in FY20 to 34 per cent by FY30.

Omni-channel push

Fashion and beauty brands, including Nykaa, Sugar Cosmetics and Snitch have expanded their physical retail presence as digital customer acquisition costs rise and consumers seek more tactile, experience-led engagement.

That is not necessarily a retreat from e-commerce. Instead, it reflects a broader shift towards omni-channel retail, as brands look to improve trust and repeat engagement in an increasingly crowded online marketplace.The transition is unfolding even as India’s beauty and personal care market is projected to grow from 24billioninFY25to24 billion in FY25 to 24billioninFY25to40–45 billion by FY30, with online penetration expected to rise from 6 per cent in FY20 to 34 per cent by FY30.

Fashion, however, remains largely fragmented, with more than 60 per cent of the market still unorganized and unbranded despite years of online expansion, reflecting how digitisation is increasingly outpacing formalisation.For Gen Z-focused fashion startups, creator-led discovery and rapid trend cycles are increasingly reshaping the retail model.

“At NEWME, we measure the trend-to-product cycle in days, not seasons,” said Sumit Jasoria, co-founder and CEO of fashion startup NEWME, adding that younger consumers increasingly discover and purchase trends almost instantly through creator-led content and social commerce as the company expands beyond digital into omnichannel retail.

FMCG reset

Rather than building digital-first brands internally, legacy FMCG firms are increasingly acquiring niche wellness, skincare and premium food start-ups to gain faster access to younger consumers, quick-commerce channels and high-margin categories.

Marico, whose digital-first portfolio includes Beardo, Plix, True Elements, Cosmix and 4700BC, recently crossed the ₹1,000-crore annual recurring revenue mark as it pushes to derive nearly one-third of revenue from digital-first and wellness brands by FY30.

Hindustan Unilever’s acquisition of Minimalist and ITC’s acquisition of Yoga Bar reflect how incumbents are increasingly viewing D2C start-ups not merely as competitors, but as engines of premiumisation, consumer insight and faster product innovation.

The report also highlights changing consumer behaviour across categories, with men’s skincare adoption doubling and nearly 45 per cent of protein-category revenue now coming from quick-commerce and e-commerce platforms.

Together, the shifts suggest India’s first D2C wave democratised discoverability and lowered barriers to brand creation; the next may separate durable consumer businesses from transient online sensations by making trust, operational discipline and product credibility the currencies of long-term success.

The next D2C wave

The geography of India’s D2C consumption is also changing rapidly. Categories once seen as metro-centric — including premium skincare, protein nutrition and wellness supplements — are witnessing rising demand from cities such as Indore, Ahmedabad, Coimbatore and Udaipur.

“The founder who cracks Patna today is building something as valuable as the one who dominated Powai a decade ago,” Rahul Jain, CEO of Strategic Growth Advisors, said in the report.

The next phase of growth, however, may depend less on visibility and more on trust. “Gen Z consumers have fundamentally changed the way brands think about discovery, engagement and commerce,” said Ashutosh Valani, co-founder of RENÉE Cosmetics, adding that younger consumers increasingly expect authenticity, innovation and seamless omnichannel experiences from brands.

That shift is now spilling beyond beauty and fashion into newer lifestyle categories as well. “Consumers don’t think in categories — they think in identities,” said Abhinav Pathak, co-founder and CEO of travel and luggage platform Escape Plan. “Luggage is no longer viewed purely as a functional purchase. Much like sneakers or backpacks, it is increasingly becoming an extension of identity.”

The trend is also visible in the rise of Shark Tank India, which the report describes as “a national curriculum on D2C brand building.” According to the report, 80 per cent of brands featured on the show were digital-first at the time of pitching, while 30 per cent later raised follow-on venture funding.

Several breakout brands from the show have since scaled nationally through ecommerce, quick commerce and offline retail expansion. Menswear brand Snitch expanded aggressively offline after its Shark Tank appearance, while brands such as Skippi Ice Pops, Beyond Snack and Nish Hair used the platform’s visibility to accelerate trust and distribution.

Identity over utility

Abhinav Pathak, co-founder and CEO of travel gear brand Escape Plan, said one of the company’s strongest-performing products among Gen Z consumers is its laptop cabin trolley, reflecting how younger travellers increasingly blur the boundaries between work, travel and lifestyle.

“Unlike previous generations, Gen Z doesn’t separate work, travel, fitness and lifestyle into different buckets,” Pathak told businessline.

He said younger consumers are also increasingly making purchase decisions through the lens of identity rather than pure utility. Through partnerships with brands such as HRX, Rare Rabbit and Snitch Travel, Escape Plan is targeting distinct consumer personas ranging from performance-driven travellers to fashion-led buyers.

“Consumers today are not simply buying luggage; they are buying into what the brand represents,” he said. “Much like sneakers or backpacks, luggage is increasingly becoming an extension of identity.”

From visibility to credibility

That transition is becoming especially visible in beauty and personal care, where consumers are moving away from celebrity-led branding towards ingredient awareness and outcome-driven purchasing behaviour. Brands such as Minimalist and The Derma Co have benefited from rising preference for ingredient transparency and science-backed skincare.

The report also points to a growing shift toward ingredient-aware and outcome-driven consumption. “A few years ago, beauty in India was driven by ‘natural’ claims… Around 2020, the shift toward science-backed actives like retinol, niacinamide and peptides made consumers far more ingredient-aware,” says Hitesh Dhingra, founder of skincare brand Puresta,, warning that the trend has also led to “overwhelm” among consumers experimenting with products without proper guidance.

The report suggests the next phase of skincare growth may increasingly move toward dermatologist-led care, clinically backed formulations and AI-supported personalisation, signalling that India’s D2C market is no longer just about getting noticed, but about staying trusted.

“Gen Z consumers have fundamentally changed the way brands think about discovery, engagement and commerce,” Ashutosh Valani, co-founder of RENÉE Cosmetics, said.

Published on June 9, 2026