The Evolution of D2C Sales Channels: Beyond Quick Commerce

The direct-to-consumer (D2C) market in India has undergone a seismic shift over the last few years, with 2024 offering explosive growth for brands leveraging quick commerce platforms like Zepto, Blinkit, and Swiggy Instamart. Quick commerce provided an exciting distribution model that met the needs of modern consumers demanding instant gratification. However, as we step into 2025, D2C brands are rethinking their strategies, learning from both the advantages and limitations of quick commerce to ensure long-term growth and profitability.

This article explores why D2C brands are diversifying their distribution strategies and what this means for the future of the sector.

The Changing Landscape of Quick Commerce and D2C

Quick commerce platforms were a game-changer for India's D2C players in 2024. Rising categories like health, wellness, and beauty thrived by leveraging these platforms to reach consumers faster than ever before. Brands like Wellbeing Nutrition and Arata emerged as shining examples of this success, with Wellbeing Nutrition achieving monthly revenues of ₹10.5 crore—41% of which came from marketplaces, including quick commerce channels.

However, as impressive as these results may be, questions around sustainability have started to surface. Leaders are recognizing that while quick commerce has been a boon, it cannot serve as the sole pillar for long-term business strategies. The D2C sector is now entering a phase of maturity, highlighted by a renewed focus on diversification.

A Boon with Limitations

Few can argue against the initial benefits that quick commerce has offered to D2C brands:

• Massive Reach: Instant delivery opened a new avenue to reach urban customers who prefer on-demand access to their favorite products.
• Revenue Growth: Brand visibility on these platforms fueled consistent growth in sales, particularly in high-demand segments like beauty, health, and even electronics.
• Consumer Convenience: Quick commerce met the rising expectations for speed and convenience, two factors driving purchase decisions in the modern economy.

Yet, despite the tremendous opportunities, the model is not without its drawbacks:

1. High Commissions

Quick commerce platforms charge commission fees ranging from 5% to as high as 30%. These fees quickly erode profit margins, forcing brands to rethink their pricing strategies to stay competitive.

1. Rising Advertising Costs

Maintaining visibility amid fierce competition requires substantial investment in platform ads, significantly cutting into revenue at a time when profit margins are increasingly important.

1. Limited Shelf Visibility

One of the challenges of quick commerce platforms is the limited “shelf space” for each product category. Brands often struggle to gain long-term visibility without heavy promotional spending, making it harder for smaller D2C brands to scale effectively.

These limitations make it clear that while quick commerce is a critical channel, it cannot shoulder the full weight of a brand's distribution efforts.

The Move Towards Diversification

Recognizing these challenges, many D2C brands are actively pursuing diversification strategies. The goal? To strike a balance between leveraging quick commerce and building resilient, multi-pronged distribution models.

Investing in Direct-to-Consumer Websites

Rather than fully relying on third-party platforms, brands like Arata are refocusing on their own D2C websites. This approach offers several advantages:

• Higher Margins: Selling directly means brands can avoid hefty commission fees.
• Full Control: Brands retain control over the user experience, customer journey, and brand positioning.
• Customer Data: D2C websites provide brands with valuable insights into consumer behaviors, which are crucial for personalization and loyalty-building.

Exploring Offline Retail

Dhruv Madhok, co-founder of Arata, highlights the potential of offline retail, stating, “Maybe once quick commerce plateaus... the next wave could be offline retail.” By diversifying into offline stores, pop-ups, and partnerships with retailers, brands can tap into a new consumer base while aligning with India’s growing organized retail landscape.

Long-Term Partnerships

Investing in omnichannel strategies, brands are increasingly forming partnerships with traditional marketplaces like Amazon and Flipkart while maintaining a presence on quick commerce platforms. Striking such partnerships diversifies revenue streams and strengthens distribution networks.

The Golden Era of Quick Commerce

While brands explore alternatives, it’s important not to overlook the phenomenal growth of quick commerce over the past year. During 2024:

• Companies like Zepto raised over $1 billion in funding to dominate the quick commerce space.
• Categories expanded beyond groceries to include beauty products, small electronics, and even niche segments like sexual wellness.

For instance, sexual wellness brand MyMuse saw a tenfold increase in demand for its products on Blinkit—testament to the consumer shift toward quick commerce for non-traditional categories.

Quick commerce is set to remain relevant and lucrative, but brands are wise to hedge against potential market fluctuations by broadening their strategies.

Challenges for Quick Commerce

Despite its monumental rise, the quick commerce model has its challenges:

• Intense Competition

Platforms compete aggressively for user attention, forcing brands into price wars or extensive advertising campaigns.

• Margin Pressures

The sales growth often comes at a heavy cost, and some believe platforms must evolve to stabilize their pricing models.

• Sustainability Concerns

Questions around the long-term financial sustainability of instant delivery platforms continue to loom, prompting investors and brands alike to be cautious.

Avnish Chhabria of Wellbeing Nutrition sums it up aptly, “Holistically, prices have to stabilize. Brands can't get on this progressive ad war... even brands are getting a lot smarter.”

The Road Ahead for D2C Brands

The evolution of D2C distribution strategies in India reflects a broader shift toward sustainability and adaptability. For brands looking to thrive in 2025, here’s what the future holds:

1. Hybrid Models

A combination of D2C websites, quick commerce platforms, marketplaces, and offline stores will become the gold standard for balanced growth.

1. Focus on Profitability

While growth remains important, the focus is now shifting toward operational efficiency and maximizing profit margins.

1. Building Community

Brands that connect with their consumers at an emotional level—through storytelling, personalization, and consistent communication—will maintain a competitive edge.

Charting a Sustainable Path Forward

India’s D2C market is at an exciting juncture as brands experiment with diversified business models while navigating a rapidly changing marketplace. Quick commerce platforms will continue to play a critical role but not in isolation. By adopting a hybrid, omnichannel approach, brands can achieve sustainable growth while meeting evolving consumer demands.

For D2C businesses, the challenge is clear, but so is the opportunity. Now is the time to innovate, adapt, and build for the long haul.

Feel free to share your experiences and insights in the comments below. Let's continue the conversation and grow together as a community of traders and analysts.

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Disclaimer

This article should not be interpreted as investment advice. For any investment decisions, consult a reputable financial advisor. The author and publisher are not responsible for any losses incurred by investors or traders based on the information provided.