What India's D2C brands learned about profitable growth

For most of the last decade the Indian D2C playbook was simple: launch on your own website, buy customers on Meta and Google, and raise the next round on growth. On its own, that model has stopped working. Acquisition costs rose and cash on delivery returns ate margins. The brands that reached profit spread across marketplaces, quick commerce and offline shelves while building retention channels they own. Their filings and interviews show how, and much of it applies to a far smaller brand.

1. Paid social gets you launched; it won’t keep you profitable

Meta and Google are still where most Indian D2C brands find their first customers. What changed is the price, and how brands judge it.

A July 2026 Inc42 feature has a clear example. Renée Cosmetics’ co-founder told Inc42 that when the brand started, ad spend was close to revenue, roughly ₹1 of marketing for every ₹1 of sales. As the business matured that fell to about 0.7–0.75, and it now stands at around 0.45. The brand had expected marketing to drop below 40% of revenue by now. It has stayed around 45%, because Meta, Google and influencer marketing all got more expensive and large FMCG companies piled in.

Listed brands spend heavily too. In its 2025-26 annual report, Honasa Consumer, the parent of Mamaearth and The Derma Co, reported consolidated advertisement expenses of about ₹788 crore for the year, against revenue from operations of ₹2,478.5 crore on a like-for-like basis. Roughly a third of revenue, at a company that has been profitable.

Why ROAS lost the vote

The same Inc42 piece quotes an investor at Kae Capital: a campaign can show a 3x ROAS and still hide a real profit margin of about 5% once product costs, discounts and returns come off. It also reports that audiences tire of the same ad within 30–45 days, so brands pay a constant creative “refresh tax”. Brands are switching to blended CAC, marketing efficiency ratio (MER) and contribution margin after marketing, and many now set aside 20–30% of budget for retention and brand-building.

The lesson for a smaller brand: recalculate unit economics per order, with contribution margin after product cost, shipping, payment fees, RTO and ad spend, and judge paid channels on that and on payback period. Platform ROAS stops being the headline number. The LTV, CAC and payback lesson walks through the calculation.

2. Cash on delivery stays, so manage what it costs

Cash on delivery is how much of India still prefers to buy from brands it doesn’t know. GoKwik, a checkout provider used by many D2C brands, said in a 2023 release reported by the Free Press Journal that 75% of orders on its network in FY 2022-23 were COD.

The cost is return to origin (RTO): orders refused or undeliverable that come back. You pay shipping both ways, stock sits in transit, and the ad spend that won the order is gone. Amazon’s Smart Commerce guidance for sellers puts COD rejection rates at 20–40%, against typically under 5% for prepaid orders, and says returned products can sit in transit for 7–14 days.

Run illustrative numbers. A brand shipping 2,000 COD orders a month at an average order value of ₹900 sees 25% come back. At ₹120 of forward and reverse shipping per returned order and ₹250 of ad spend per order, those 500 returns cost ₹60,000 in shipping and ₹1,25,000 in acquisition spend that bought nothing: about ₹1,85,000 a month before damaged stock and packaging. Bring RTO down to 15% and roughly ₹74,000 a month comes back. Use your own figures; these are for shape.

What brands actually do

• Score and verify risky orders before dispatch, with confirmation calls or WhatsApp messages for high-value or first-time COD orders.
• Nudge buyers to prepaid with a small discount, free shipping or faster dispatch for UPI payments.
• Switch COD off selectively. Amazon calls this COD suppression: removing the option for high-risk segments such as pin codes with high RTO, high-ticket items or customers with past refusals, and keeping it for everyone else.

Start by pulling your RTO rate by pin code, by order value, and for first-time against returning customers; the worst segments get verification or lose COD. Dropping COD for everyone usually loses more orders than it saves. The cash on delivery optimisation tactic has the step-by-step.

3. Every channel gets a job

Early D2C brands often treated Amazon, Flipkart and Nykaa as a necessary evil. The profitable ones now give each channel a job.

Honasa’s annual report spells it out. D2C “acts as our listening post” where new brands and products are tested, e-commerce scales them, and offline and quick commerce extend reach. The company says its channels now carry broadly similar contribution margins.

Quick commerce is the fastest-moving piece. Honasa reports that its quick commerce business more than doubled over FY 2025-26 and now contributes around a tenth of revenue, with the strongest momentum in high-frequency categories such as face washes, where fast replenishment suits the format.

Each channel costs you something:

Decide which channel exists to acquire, which to scale and which to retain, and cut spend on any channel that does none of those well. Your website doesn’t have to be the biggest channel. It has to be where you learn fastest and keep the customer relationship.

4. Offline has the volume, and runs like a different company

The biggest surprise is how far “digital-first” brands have gone into physical retail.

Honasa says offline made up 32% of its revenue in FY 2025-26, up from 27.6% the year before. It rebuilt general trade around direct distributors, who now account for close to 80% of its general trade billing, up from roughly a third two years earlier. It billed over 1.2 lakh outlets directly and reached more than 2.75 lakh FMCG outlets in total.

Renée Cosmetics gets 65% of its sales from offline stores, according to the Inc42 feature, and only about a quarter of its online sales come through its own website.

Lenskart started online and is spending much of its IPO money on stores. Inc42’s coverage of its RHP says it earmarked ₹272.6 crore of the fresh issue for new company-owned stores and planned to add 620 more by FY29.

Honasa’s report is candid that the offline rebuild hurt. Offline revenue share fell from 35% in FY 2023-24 to 27.6% in FY 2024-25 during the move from a super-stockist model to direct distribution, then recovered. Offline needs working capital, sales teams, distributor management and patience.

So don’t go offline to escape high CAC. Go when you have a hero product with proven online repeat, and start narrow (a few modern trade chains, or one city) so you can measure sell-through before you scale.

5. WhatsApp now sells, as well as supports

WhatsApp began as the place Indian brands sent order updates. Now it is part of how they sell.

GoKwik’s WhatsApp Commerce Intelligence Report 2026, reported by Outlook Business, analysed 26 billion messages from more than 1,800 D2C brands. It found that 83% of WhatsApp-driven orders in the October–December 2025 festive quarter came from first-time buyers. Automated journeys (abandoned cart reminders, order updates, loyalty prompts) averaged an 11.1% click-through rate across the year, against 2.6% for broadcast campaigns. Those are one vendor’s network figures, so read them as directional. The gap between automated and broadcast is still wide.

Costs moved as well. Meta’s developer documentation says the WhatsApp Business Platform has charged per delivered template message since 1 July 2025, with rates set by category (marketing, utility or authentication) and the recipient’s country. Utility templates sent inside an open customer service window are free. At the time of writing (October 2026), that makes transactional and service messages cheap and pushes brands to ration marketing broadcasts.

Build triggered journeys before broadcasts: COD confirmation first, then abandoned cart, delivery updates with a reorder link, and a replenishment reminder timed to when the product runs out. The WhatsApp marketing tactic covers set-up and consent.

6. The profit is in the second order

All five lessons above end up here. If acquisition costs a third or more of first-order revenue, the first order rarely makes money. The second, third and fourth do.

If 30% of customers buy again within six months, six-month contribution per acquired customer goes from ₹10 to about ₹106. At a 40% repeat rate it reaches about ₹138. The numbers are made up; the shape holds for most consumable categories.

Hence the budget moving from acquisition to retention. In practice:

• Time replenishment reminders to the product’s real usage cycle instead of a generic 30 days.
• Segment by recency and frequency, so a one-time buyer from 90 days ago gets different treatment from a regular. The RFM segmentation lesson shows how.
• Run a win-back flow for customers who have gone quiet, starting with a reminder and only then an offer. The lapsed customer win-back tactic lays out the sequence.
• If customers prefer to reorder on quick commerce or a marketplace, let them, and measure total repeat across channels instead of only on your website.

Then measure the 90-day repeat rate for your last three monthly cohorts. If it isn’t rising, fix retention before you raise the acquisition budget.

Questions people ask

Why are Indian D2C brands moving offline?

Because online acquisition keeps getting more expensive and most consumption still happens in physical retail. Honasa Consumer, which owns Mamaearth, got 32% of its FY 2025-26 revenue from offline channels, and Inc42 reported that 65% of Renée Cosmetics' sales now come from offline stores.

How do D2C brands reduce RTO on cash on delivery orders?

By keeping COD but making it selective: verifying risky orders before dispatch, nudging buyers to prepaid with small incentives, and switching COD off for pin codes, order values or customers with a history of refusals. Amazon's seller guidance calls this COD suppression.

Is quick commerce good for D2C brands?

It can be, especially for frequently bought products. Honasa says quick commerce more than doubled for it in FY 2025-26 and now contributes around a tenth of revenue. The trade-off is less customer data and platform margins, so brands still need their own channels for retention.

What metrics should D2C brands track instead of ROAS?

Blended CAC, marketing efficiency ratio (total revenue divided by total marketing spend), contribution margin after marketing, and payback period. Inc42 reports that Indian D2C brands are moving to these because a healthy-looking ROAS can hide a thin margin once discounts, returns and product costs are counted.

Sources

• Inc42: The End Of The ROAS Era In D2C?
• NSE: Honasa Consumer Ltd. Annual Report 2025-26
• Free Press Journal: GoKwik network touches 100 million base
• Amazon Smart Commerce: COD suppression for RTO
• Outlook Business: D2C brands lean on WhatsApp to find new customers
• Meta for Developers: WhatsApp Business Platform pricing
• Inc42: Lenskart files RHP, IPO to open on Oct 31

• d2c
• india
• ecommerce
• unit-economics
• retention