D2C brands chase 30% festive growth as baskets shrink

India’s D2C brands are walking into the festive season with a bold number on the board: more than 30% growth over last year. The challenge is that the arithmetic underneath is getting harder. Customer acquisition costs have climbed 15–20% to Rs 600–650, quick-commerce ad rates are up 25–50%, and shoppers are buying fewer things they truly love rather than more things that just fill a cart.

The gap between orders and value

Early festive data tells a cautionary tale. Unicommerce figures show online orders rose 31% in the first week, but gross merchandise value grew only 17%. That points to an average order value drop of roughly 10%. More people are buying, but each basket is lighter.

This is not a seasonal blip. Kearney partner Ankur Singh expects D2C GMV growth of 20–25% with a wide spread between winners and laggards, even as brands officially target 30%.

Considered buying, not trading down

Shoppers are becoming more selective, not necessarily cheaper. At footwear brand Theater xyz, founder Sarthak Aggarwal expects close to 2X growth, driven by boots and stockings in the winter, Diwali, weddings and holiday season. “People are buying fewer things, but things they really love,” he said. A customer would rather buy one pair of boots she’ll wear all winter than three she’ll forget.

At skincare brand Foxtale, consumers are upgrading through trial packs on Blinkit and Swiggy Instamart. They want better products with good reviews, but that does not mean their basket value is rising. Sleepy Owl sees the same shift: demand for larger 100 gm jars and ready-to-drink formats has risen over 50% as consumers move from sachets to bigger formats. Co-founder Ajai Thandi puts it bluntly: “India is often described as a price-led market. Our experience is that it is a value-led market.”

The acquisition-cost squeeze

Festive visibility is expensive. With marketing budgets up 15–30% and marketplace and retail media becoming leading channels because they tie spend to sales, brands are under pressure to make every rupee of demand profitable. Some are cutting discounting year-on-year; others like Miraggio are discounting more but balancing value with positioning.

Sleepy Owl uses discounts to start a relationship, not sustain it; Theater xyz avoids discount-led acquisition entirely, arguing discounts teach people to wait. Around 40% of Theater xyz’s festive customers are repeat buyers this season.

Where the growth actually lives

Tier 2 and Tier 3 markets are the engine. Singh estimates they account for nearly two-thirds of online orders, with Tier 3 alone at 42–45%. Sleepy Owl has grown over 200% in these markets, now more than a quarter of its revenue. Foxtale says Tier 3 is its fastest-growing segment.

The lesson for brand teams:

• Track orders and GMV separately; order growth alone can hide a shrinking basket.
• Use trial packs to help customers upgrade without committing to a full-size purchase.
• Discount to open a relationship, then convert first purchases into repeat habits.
• Treat post-return net sales as the real score in fashion categories.

Festive growth is still there, but only for brands that win on value, not just visibility.

Source: ETRetail.com