Ecommerce & Startups

The Rise of D2C Brands : Is the Party Over for E-commerce Giants in India?

This article explores a fascinating shift in the Indian e-commerce landscape: the growing popularity of direct-to-consumer (D2C) brands and the potential decline of major marketplaces. Our research at indicates that both sellers and customers are expressing dissatisfaction with the current marketplace model, even for platforms known for their customer focus.

Marketplaces Stagnate, D2C Brands Surge

We’ve observed a consistent trend: Marketplaces are struggling to achieve significant growth, often hovering around single digits year-over-year (YoY). Conversely, D2C brands are experiencing impressive growth rates. Our analysis of 27 D2C online fashion and apparel brands revealed a growth range of 12% to 34% YoY. This data showcases the clear advantage D2C brands currently hold.

Publicly available web traffic data paints a similar picture. reportedly saw a 12% month-over-month (MoM) decline in traffic between January and February 2024, translating to a loss of 38.3 million visitors. This downward trend continued into March. Flipkart exhibits a similar trajectory, with a reported 14% MoM decline in traffic for February 2024 compared to January.

D2C Growth: Across the Board & Changing Preference

Further strengthening the D2C case, nearly all 27 brands we analyzed reported a minimum growth of 27% in March 2024 compared to January. This consistency across multiple brands highlights the robust performance of the D2C sector.

In a recent phone survey of 145 customers conducted in February 2024, we found a big shift in what consumers prefer. Now, 57% of people said they prefer to buy from direct-to-consumer (D2C) brands. They like these brands because they offer a unique shopping experience, better prices, and more value. This is a big change from a similar survey in 2022, where we saw a 34% increase in interest in D2C brands. This shows that more and more people are turning to these brands.

D2C Brands: Driving Value and Order Value Growth

We’ve also observed that D2C brands are not only attracting customers but also driving higher order values. On average, D2C brands have witnessed a significant 17% year-over-year (YoY) growth in order value. This indicates that customers are not just choosing D2C brands more frequently, but also making larger purchases when they do.

Understanding Bounce Rates: Website Engagement

Here’s how websites track user engagement: Imagine a clothing store. A high bounce rate would be like people walking in, looking at the door, and leaving. They didn’t browse the clothes, try anything on, or make a purchase. This suggests the store might not be very inviting or have what people are looking for.

Similarly, a website’s bounce rate measures how many visitors leave immediately without looking at other pages. A lower bounce rate means people are finding what they need and spending more time exploring the website. Our data shows that leading marketplaces have an average bounce rate of around 45%, while successful D2C startups keep theirs below 37%. This indicates that D2C brands are doing a better job of keeping users engaged on their websites.

Our Principal Consultant, Nitin Lodha, expects the difference in growth between marketplaces and direct-to-consumer (D2C) brands to keep getting bigger until 2028. He thinks D2C brands will keep growing quickly, at least by double digits, for the next three years. On the other hand, he believes marketplaces will not grow much and their business model will become more static. Mr. Lodha also predicts that the strong position of marketplaces will gradually decrease over time. Our research suggests that the growth gap between marketplaces and D2C brands will continue to increase exponentially until 2028.


The Indian e-commerce landscape is undergoing a transformation. While marketplaces grapple with stagnation, D2C brands are flourishing. This shift reflects changing consumer preferences, a growing focus on value, and a more favorable environment for D2C startups. As D2C brands continue to refine their strategies and cater to evolving customer needs, their success story is likely to continue for years to come.


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