Rising digital ad costs and instant-purchase platforms are forcing brands to prioritise retention, brand-building, and customer relationships over aggressive customer acquisition
India’s direct-to-consumer (D2C) brands, long defined by their appetite for aggressive customer acquisition, are making a decisive pivot towards retention, brand-building and product differentiation. The shift comes as rising digital advertising costs and the explosive growth of quick commerce force a fundamental rethink of growth strategies, according to senior executives.
“The biggest reimagination has been the mindset shift—from thinking of yourself as a D2C brand to becoming a consumer brand,” said Utsav Malhotra, Chief Operating Officer at Noise, speaking at the ad:tech exhibition. “In the early stages, D2C is seen as an enabler where metrics like ROAS and CAC dominate decision-making. But as you scale, you realise the metrics that matter are very different.”
At the heart of this reset is a critical reframing: acquisition is a cost centre, while retention is a long-term asset.
“Acquisitions are rented, retention is earned,” Malhotra added. “There is only so far you can go with acquisition. You need to optimise for trust and visibility.”
Quick Commerce Collapses the Funnel
The urgency behind this shift is being accelerated by the rise of quick commerce. As consumers increasingly discover and purchase products on platforms promising delivery within minutes, the traditional multi-stage marketing funnel—awareness, consideration, trial and purchase—is rapidly collapsing.
“Your entire funnel—from awareness to trust, trial and purchase—has collapsed to 26 seconds,” said Chamkrit Arora, Chief Business Officer at Wholesome Foods, which operates children’s food brand Slurp Farm. “It’s not just about being present on quick commerce platforms. It’s about rebuilding your entire marketing funnel and doubling down on brand, rather than just focusing on operations and logistics.”
This compression is reshaping revenue dynamics. Arora noted that 75 per cent of Slurp Farm’s revenue is now driven by brand searches—an indicator of strong top-of-mind recall in a landscape where performance marketing has limited time to influence decisions.
Defending the Moat Through Community
For early movers in niche categories, the challenge has intensified as competition grows. Slurp Farm, founded nearly a decade ago around millet-based children’s nutrition, now faces competition from both well-funded start-ups and established FMCG players.
The response, Arora said, has been to double down on what is hardest to replicate: customer relationships.
The company operates city-specific WhatsApp communities staffed by nutritionists, co-creates educational content with doctors, and has built a community of over 18,000 mothers.
“The product is just one of the tangible solutions available, but the community is real,” she said.
Rebuilding Customer Intimacy
This emphasis on relationships is evident across brands at varying stages of growth. Surinder Rajpurohit, Founder and CEO of Terms Intelligent Apparel, makes it a point to personally speak with ten customers every day—a practice he says delivers insights no dashboard can match.
“These calls can go on for 30 minutes. Customers openly share suggestions,” he said.
Rajpurohit, who acquired the brand post-pandemic and repositioned it around functional apparel—including 30-day no-wash jeans and seven-day odour-resistant socks for travellers—said 75 per cent of repeat business and engagement stems from direct, human-led interactions rather than automated communication.
“Nearly 75 per cent of our repeat engagement comes from team-led customer calls, not emails,” he added.
Designing for Retention from Day One
Even early-stage brands are embedding retention into their core strategy. Rachit Kulhar, Founder of Lovely Blue, a seven-month-old fragrance brand targeting Gen Z consumers, said the company is already analysing Month 6 cohorts.
Launched with a trial-first approach—a Rs 400 starter pack backed by a full money-back guarantee and conversion incentives—the brand is designed to prioritise repeat usage from inception.
“We wanted India to try our fragrances,” Kulhar said. “Acquisition is rented; repeat business is earned. That philosophy shaped our launch.”
Profitability Becomes the New Benchmark
Across the sector, founders agree that success metrics are evolving.
“Brands will no longer be judged purely on scale,” Malhotra said. “They will be judged on profitability. That shift is already underway.”
Noise itself reflects that discipline. Malhotra described it as the only bootstrapped Indian consumer brand to have crossed Rs 1,000 crore in revenue profitably, while holding roughly one-third market share in a category with over 200 competitors.
The broader takeaway, he argued, is clear: the next phase of growth for India’s D2C sector will not be defined by how efficiently brands acquire customers, but by how effectively they retain them.
