# 13611The Rise of D2C Brands : Is the Party Over for E-commerce Giants in India?
D2C brands are winning on growth and loyalty as shoppers prefer direct, more personal buying. A business architecture consulting lens reveals why marketplaces stall.
with the Business Architect.
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 Chitrangana.com 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. Amazon.in 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.
Conclusion
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.
The D2C Model: Why It Resonates in India’s Market
India’s D2C boom is not simply a global trend transplanted to local soil — it is a response to specific market conditions that make direct consumer relationships particularly valuable here. High marketplace commissions (typically 15–30% on major platforms), algorithm dependency, and limited ability to build brand equity on third-party platforms all add friction. Combined with the challenge of standing out in crowded marketplace listings, these pressures have pushed ambitious consumer brands toward building their own direct channels.
D2C Success Stories Reshaping Indian Commerce
Brands like Mamaearth, boAt, Sugar Cosmetics, and The Man Company have demonstrated that Indian D2C brands can achieve significant scale while maintaining brand integrity. Their success has inspired thousands of smaller brands across categories — from ayurvedic wellness and regional snack foods to sustainable fashion and personalised gifting — to go direct.
The Challenges D2C Brands Face in 2024–2025
The D2C model comes with inherent challenges that have become more visible as the sector matures:
- Customer Acquisition Cost (CAC): Rising digital advertising costs are compressing margins for brands that rely heavily on paid channels
- Retention vs. Acquisition: Many D2C brands optimised heavily for new customer acquisition and are now grappling with low repeat purchase rates
- Logistics complexity: Managing last-mile delivery across India’s diverse geographies independently is expensive and operationally complex
- Returns management: Fashion and apparel D2C brands face return rates of 25–40%, creating significant reverse logistics costs
- Technology investment: Building and maintaining a high-converting D2C website requires continuous investment in technology and UX
The Future: Hybrid D2C Strategies
The most successful D2C brands in India are increasingly adopting hybrid strategies — maintaining a strong direct channel while selectively using marketplaces for discovery and volume. The key is using marketplaces as an acquisition channel while migrating valuable customers to the direct channel for long-term retention. This approach maximises reach while protecting brand equity and margins.
Building a D2C brand in India? Chitrangana’s D2C consulting practice helps brands at every stage — from launch strategy to scale-up and international expansion.
Looking for expert eCommerce consulting services in India? Chitrangana provides architecture-led digital commerce consulting for D2C, B2B, and marketplace businesses since 2007.
If you’re weighing marketplace versus D2C strategy, Chitrangana’s Business Transformation Consulting team can help you build the right channel mix.
Frequently Asked Questions
Why are D2C brands growing faster than marketplaces in India?
High marketplace commissions, algorithm dependency, and limited ability to build a distinct brand are pushing more consumer brands to sell directly to customers.
Does this mean marketplaces are no longer useful for brands?
No. Marketplaces still offer reach and discovery. Many brands use them alongside their own D2C channel rather than choosing one over the other.
What should a brand consider before shifting focus to D2C?
Building a D2C channel requires investment in your own traffic, logistics, and customer service, so brands should plan for that cost before scaling it back from marketplaces.
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