Experts Say 2026 Will Reward Discipline, Not Scale, in India's D2C Sector Slower funding, changing consumer behaviour, and rising competition are forcing D2C brands to rethink how they grow, with 2026 shaping up as a test of execution rather than ambition

After years of rapid growth and a sharp reset, India's direct-to-consumer (D2C) sector is expected to settle into a more balanced phase. The period of easy funding, aggressive customer acquisition and scale-at-all-costs expansion is clearly over, experts suggest. Now, what lies ahead in 2026 is a shift towards steadier growth driven by better execution, stronger retention and clearer brand positioning.

According to Bain and Flipkart, India's e-retail market is projected to reach $170–190 billion in GMV by 2030, driven by a growing online shopper base and evolving commerce models. As adoption deepens across Tier-2 and Tier-3 cities, high-frequency categories such as grocery and lifestyle are expected to drive a larger share of growth, making repeat purchase and habit formation critical for D2C brands.

Against this backdrop, 2026 is shaping up as the year when D2C brands are judged less on ambition and more on outcomes.

A Post-Hype Phase of D2C

Industry observers say the D2C ecosystem has clearly moved beyond its hype-driven phase. Devangshu Dutta, Founder and Chief Executive of retail consultancy Third Eyesight, describes the current moment as one of structural correction rather than contraction.

"India's D2C ecosystem is in a post-hype phase where growth may be slower but structurally healthier," Dutta says, adding, "Earlier growth cycles prioritised visibility and sales at the expense of profitability and consistency. Now, success is being measured by repeat rates, contribution margins and the ability to fund growth internally."

Tighter funding is also driving this shift. With D2C investments slowing and overall capital remaining cautious, brands are now being pushed to show predictability rather than promise. Tracxn data shows Indian D2C startups raised USD 757 million in 2024, significantly lower than previous years, while overall PE-VC investments in India remained flat at USD 33 billion in 2025, according to Venture Intelligence.

As a result, Dutta notes that many D2C companies are rationalising portfolios, tightening inventory cycles and optimising supply chains. Marketing strategies, too, are evolving, with greater emphasis on retention, community-building and owned channels instead of discount-led growth.

Uniqueness Will Define Winners

If capital discipline is one defining force, speed is another. Harish Bijoor, business and brand strategy expert, argues that D2C's next phase will be shaped by how brands respond to a faster, more fragmented commerce environment.

"The e-commerce revolution led to a more refined orientation of D2C, and that has now given way to a q-commerce revolution that is even faster," Bijoor says, adding, "The D2C revolution is going to be leveraged by speed. A whole host of players will invest time, energy and innovation into this."

In Bijoor's view, traditional e-commerce is now the slowest layer in a spectrum where quick commerce is the fastest, and D2C sits in between. In such a landscape, competing purely on price is no longer sustainable. He believes differentiation will increasingly come from uniqueness and premium positioning rather than ubiquity.

"When you know that you get a particular great-tasting biryani at just one place with no branches, you will go to that place. That uniqueness is what will distinguish D2C commerce in the future," he says.

Bijoor adds that many D2C brands have been trapped in price wars under the guise of differentiation. He also argued that brands that premiumise and resist excessive omnichannel dilution are more likely to build desirability and long-term value.

Consumers Move Beyond Metros

Structural shifts in demand are reshaping how and where D2C brands grow. India now has one of the world's largest and most diverse online consumer bases, with growth increasingly driven by Tier-2, Tier-3 and smaller towns rather than metros alone. Internet adoption continues to deepen across rural and semi-urban India, expanding the addressable market well beyond early digital buyers.

This widening base is changing the nature of growth. Consumers are becoming more deliberate in how they spend, weighing value, quality and trust more carefully than before.

As Devangshu Dutta notes, Indian consumers have always been discerning, but rising living costs and economic uncertainty have made them even more thoughtful, pushing brands to earn repeat demand rather than rely on impulse or discount-led purchases.

"Value is not just about discounts," he says. "It's a balance of price, performance and trust. For D2C brands, repeat consumption has to be earned through consistent quality, transparent pricing and dependable service."

High-frequency categories such as grocery, lifestyle and general merchandise are expected to drive much of this expansion. Bain estimates these segments will account for two out of every three e-retail dollars by 2030, reinforcing the importance of habit formation and retention-led models.

Quick Commerce Expands Discovery, Not Profitability

Quick commerce has emerged as a powerful but complex growth lever for D2C brands. The format now accounts for a significant share of India's e-grocery demand and has scaled into a multi-billion-dollar market, becoming a key discovery channel for food and everyday consumption brands.

However, expansion beyond metros remains challenging. RedSeer data shows non-metro markets contribute just over 20 per cent of quick commerce GMV, even as platforms scale to over 150 cities, with breakeven economics in smaller towns requiring significantly higher throughput.

Praveen Govindu, partner at Deloitte India, cautions that while quick commerce has helped many D2C brands gain discovery, particularly in food and beverage, it is not a sustainable growth engine on its own.

"From a customer acquisition standpoint, quick commerce is not fundamentally different from traditional e-commerce," Govindu says, adding, "It is an expensive channel, and competition will only intensify. Over the long term, brands cannot rely on burning capital there."

Omnichannel Enters Its Toughest Phase Yet

As digital acquisition costs rise, India's ad market is projected to grow nearly 8 per cent in 2025 to Rs 1.37 lakh crore, with digital accounting for almost half of the spends, brands are being pushed to diversify distribution. Yet omnichannel presence alone is no longer enough.

"Many brands talk about omnichannel, personalisation and seamless journeys, but in practice these efforts are still disjointed. In 2026, the focus will shift from intent to execution," Govindu says.

RedSeer projects India's retail market to cross USD 2 trillion by 2030, with nearly 90 per cent of consumption still happening offline. For D2C brands, this makes offline expansion unavoidable, but success will depend on consistent execution across pricing, inventory, service and communication.

Consumers, Govindu notes, do not consciously differentiate between online, offline or social platforms. "They simply want a consistent experience," he says. "Even small inconsistencies can erode trust."

AI-Led Discovery and Experience

Perhaps the most transformative force shaping 2026 will be the evolution of buying journeys themselves. Govindu sees the rise of AI-led and agentic commerce as a major inflection point.

"Conversational platforms and AI-driven assistants will increasingly influence discovery, purchase, fulfilment and post-sales experiences. What earlier happened across multiple touchpoints is now beginning to happen in one place," he says.

This convergence amplifies the importance of content-led discovery, owned data and deep consumer understanding. Brands that can unify storytelling, commerce and service into a coherent narrative are more likely to build loyalty in an environment where switching costs are low and alternatives are abundant.

Whether growth comes through D2C websites, marketplaces, quick commerce or offline stores, experts agree that the real differentiator will be a brand's ability to build durable consumer relationships. As investors shift focus from short-term metrics to long-term value creation like retention, margins and brand strength, the next phase of India's D2C story is less about rapid expansion and more about refinement.