D2C in India and globally: from fast growth to profitable scale, and where SAP helps
D2C has entered its second phase
The first wave of D2C was about reach: launch online, buy attention on social media and grow quickly. The second wave is about trust, repeat purchase and economics. At a recent gathering of Indian D2C founders across food, beauty, fashion, personal care and wellness, the discussion kept returning to the same fundamentals: knowing the consumer closely, building products that earn trust, and creating the operational foundations to deliver consistently as the business grows.
The same pressure is visible globally. In a survey of 500 commerce executives cited by SAP, 72% named increasing margins and profitability as a strategic goal and 36% called it their top priority. Inflation, supply chain disruption and consumers with almost unlimited choice make margins harder to protect, and D2C has become a way to keep a direct relationship with the consumer while still selling through retail partners.
Five trends shaping D2C in India
- Growth beyond the metros. Smaller cities are now a major source of D2C sales. One large Indian marketplace reported that D2C orders in its beauty and general merchandise category grew nearly 40% year on year in July and August 2026, with tier-2 and tier-3 markets growing 60%. Brands report that more than half of beauty demand on the platform comes from non-metro cities.
- Marketplaces and quick commerce as growth channels. D2C brands now sell through their own sites, marketplaces and quick commerce at the same time, each serving a different need: planned purchases, everyday replenishment and immediate delivery.
- The move offline. Rising digital advertising costs have pushed brands into physical retail for trust, trial and discovery. D2C brands accounted for 18% of retail leasing in India in the first half of 2025, up from 8% a year earlier, according to a real estate consultancy report.
- New intermediaries, new costs. Quick commerce and retail partners take a share of revenue. A 2025 brokerage report estimated quick commerce commissions for D2C brands at 35% to 40%, with extra advertising spend on top in some cases. Physical stores add rent, staff and retailer margins.
- Trust and discipline over speed. Founders are prioritising product credibility, transparent claims, repeat behaviour and depth before breadth. Established consumer businesses are also using D2C as a direct feedback loop for product development alongside their distribution networks.
Why D2C becomes an operations problem
Once a brand sells across its website, several marketplaces, quick commerce and its own stores, the hard part moves behind the scenes. Manufacturing, inventory, distribution, fulfilment and last-mile delivery all become part of the consumer experience. The challenges are familiar to every growing brand:
- Stock that drifts out of sync across channels, causing overselling in one place and excess in another.
- Order spikes during sales events that slow processing and miss delivery promises.
- Large catalogues with many sizes, colours and variants that complicate stock tracking and listings.
- Returns, refunds and disputes that eat margin when they are not handled with clear records.
- Several warehouses, marketplaces, point-of-sale and logistics partners, each with its own data.
- Margin per channel that is hard to see once commissions, advertising, returns and logistics are added up.
Physical scale does not fix weak unit economics. The brands that win treat channel profitability, inventory and fulfilment as seriously as marketing.
What a D2C business needs
SAP describes five essential elements of a D2C operation:
- Value proposition: the right product, channel and price, launched with minimal risk and cost.
- Marketing: acquiring and engaging consumers while protecting their data and privacy.
- Direct sales channel: new business models and e-commerce across the customer lifecycle.
- Fulfilment and post-purchase: scalable, on-time delivery, lower cost per order and intelligent returns.
- Analysis and insights: one compliant view of consumer data that feeds back into products and experiences.
How SAP helps D2C brands improve
- Connect the front end and the back end. SAP links consumer-facing commerce and customer experience with ERP data, so marketing, orders, stock and finance work from the same information.
- Composable digital commerce. SAP Commerce Cloud offers modular commerce capabilities that let brands add channels and business models quickly without losing scale or reliability.
- One inventory and order truth. SAP Cloud ERP with SAP Order Management Foundation gives every channel the same real-time stock, so order promises are reliable and stock-outs and overstock fall.
- Fulfilment and returns at scale. Integrated logistics across pick, pack and ship, with returns processed in the same flow, keeps delivery promises and protects margin.
- Consumer insight with privacy built in. SAP customer data and marketing solutions bring consumer profiles together with consent management, closing the loop between what consumers do and what the brand builds.
- Channel profitability you can see. With finance and operations on one core, and SAP Analytics Cloud on top, brands can see margin by channel, region and product after commissions, advertising, returns and logistics.
- Industry solutions and AI. SAP and its partners offer industry cloud solutions for consumer products and retail built on the SAP Business AI Platform, and AI agents can take on routine work such as demand sensing, replenishment proposals and invoice matching.
Why SAP Integration Suite matters for D2C
A D2C brand lives on connections: its own webshop, several marketplaces, quick commerce partners, payment gateways, logistics and courier partners, warehouses, point-of-sale systems in stores, and the tax portal for e-invoicing. Every new channel adds another interface. SAP Integration Suite, the integration platform on the SAP Business AI Platform, brings all of them onto one managed platform instead of a tangle of point-to-point links and separate tools.
- Add channels in weeks, not months. Prebuilt integrations, connectors to hundreds of third-party systems and thousands of business accelerators make it faster to plug in a new marketplace, courier or payment partner.
- Stock and orders in sync everywhere. Event-driven integration pushes stock changes, new orders, cancellations and returns to every channel the moment they happen, which reduces overselling and stale listings.
- One view of the customer. Orders, payments and service interactions from every channel flow into SAP, so marketing, service and finance see the same customer and the same history.
- Partners connected securely. B2B integration automates order, invoice and shipping messages with distributors, retailers and logistics providers, cutting manual work and errors.
- Compliance built in. Business-to-government integration standardises and automates e-invoicing and tax reporting, so growth into new regions does not mean new manual work.
- APIs for new experiences. API management lets brands expose product, price, stock and order data safely to apps, partners and new storefronts, and reuse those APIs across channels.
- Peak-ready and reliable. An enterprise-grade platform with elastic scaling and multizone availability handles sale-day spikes without falling over.
- Ready for AI agents. Agents that re-plan stock or chase delayed shipments need real-time access to data across systems. The suite provides the secure APIs and real-time events they depend on.
Where to start
- Map every channel, warehouse and partner, and where stock, order and margin data lives today.
- Decide which processes must be standard (finance, inventory, orders) and which differentiate the brand (experience, community, product).
- Put inventory, orders and finance on one core first; add commerce, marketing and AI on top.
- Measure margin per channel from the first month, not after scale.
We help consumer brands and retailers in India design and run this foundation on SAP. See SAP for retail, SAP for consumer goods, SAP Integration Suite and our SAP S/4HANA implementation service, or start with a readiness assessment.
