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November 13, 2025
Saumyangi Yadav,Entrepreneur
Nov 13, 2025
India’s consumer landscape is undergoing a decisive shift in 2025. While D2C brands that once thrived on digital-only distribution are now aggressively building an offline footprint, legacy FMCG majors are simultaneously acquiring digital-first brands to strengthen their portfolios and tap into new consumer behaviours.
As analysts suggest, these trends signal a maturing phase for India’s D2C ecosystem, one that blends physical retail and strategic consolidation.
Offline Push Accelerates
According to a recent CBRE report, ‘India’s D2C Revolution: The New Retail Order’, D2C brands leased nearly 5.95 lakh sq ft of retail space between January and June 2025, accounting for 18 per cent of all retail leasing during this period, up sharply from 8 per cent in the first half of 2024. Fashion and apparel dominated the expansion, contributing close to 60 per cent of D2C leasing, followed by homeware and furnishings and jewellery at about 12 per cent each, while health and personal care brands accounted for roughly six per cent. The shift is equally visible in the choice of retail formats: 46 per cent of D2C leasing went to high streets, 40 per cent to malls, and the remaining to standalone stores, reflecting the category’s growing focus on visibility, trial and experiential discovery.
Experts suggest that it represents a strategic pivot to blended engagement.
As Devangshu Dutta, CEO of Third Eyesight, notes, “India’s D2C surge is powered by digital-first consumers, tremendous improvement in seamless logistics, and low-cost market entry, supported subsequently by substantial amounts of investor capital chasing those startups that stand out from the competition. Yet, lasting success demands a more holistic view: the divide between online and offline is a business construct, not a consumer reality. The larger chunk of retail sales still happens through physical channels and, for brands that want to be mainstream, an omnichannel presence is absolutely essential.”
This also aligns with the broader market outlook. The India Brand Equity Foundation (IBEF), in its Indian FMCG Industry Analysis (October 2025), estimates the value of India’s D2C market at USD 80 billion in 2024, with expectations of crossing USD 100 billion in 2025. Much of this growth is being led by categories that combine frequent purchase cycles with strong digital discovery, beauty, personal care, and food and beverage segments where consumers are open to experimentation but demand authenticity, transparency, and a compelling product narrative.
“The Gen Z and millennial consumer cohorts value newness but also authenticity and unique product stories, which are best communicated in spaces that are controlled by the brand,” Dutta added, “In the launch and growth phases, this could be the brand’s digital presence including website and social media, but over time this can include pop-up stores, kiosks, shop-in-shops and even exclusive brand stores.”
CBRE’s data reflects this shift clearly, with D2C brands increasingly opting for flexible store formats and high-street locations to maximise traffic and visibility.
M&A Gains Momentum
Parallel to the offline push is a noticeable wave of consolidation. Large FMCG companies are accelerating acquisitions to capture emerging consumer niches and strengthen their digital-native capabilities.
In recent years, Hindustan Unilever has acquired Minimalist; Marico has bought Beardo, Just Herbs, True Elements, and Plix; ITC has taken over Yoga Bar; and Emami has secured full ownership of The Man Company. These deals, reported widely across business media in 2024 and 2025, point to the need for established companies to fast-track entry into high-growth, ingredient-forward, and youth-focused categories without the lead time of in-house incubation.
“Legacy FMCG companies are acquiring D2C brands to rapidly gain access to new consumer segments, product innovation, and digital-native capabilities, including direct engagement and insights. Such deals enable large companies to diversify portfolios, accelerate entry into trending segments by-passing the initial launch risks, and rejuvenate their brands with modern digital marketing expertise,” Dutta explained.
Challenges and Risks
But the acquisitions do not come without risk and challenges, analysts warned.
“However, integrating D2C operations also poses challenges, including cultural differences, the risk of stifling entrepreneurial agility, and the need to harmonise data and omnichannel strategies. The ability to nurture acquired brands without diluting their distinctive appeal will determine acquisition success,” Dutta added.
Yet even as the ecosystem expands, challenges remain. Offline stores add operational complexity, inventory planning, staffing, last-mile logistics, and real-time data integration. Still, the bottom line is that India’s D2C sector is moving into a hybrid era defined by tighter omnichannel integration, sharper product storytelling, and portfolio realignment through acquisitions.
(Published in Entrepreneur)
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August 18, 2025
Hiral Goyal, The Morning Context
18 August 2025
A trend that has been playing out through big and small changes over the last two decades is that in urban India the kirana store is easily replaceable.
When it comes to buying groceries, urban Indians have a number of options. They can visit a fancy supermarket run by a conglomerate or order online through a number of e-commerce and instant-delivery companies. And if the above doesn’t seem easy enough, they can hop over to a nearby mom-and-pop store.
It would appear it is now the turn of smaller towns in the country to witness the kirana disruption. Even though 99% of grocery shopping in these tier-3 cities is done through neighborhood general stores, there are startups that believe this is an outdated and inefficient form of retail and a change is in order.
One such company is SuperK. The startup’s mission is to build a grocery store model in small towns that has all of the advantages of modern retail packed in a compact 800-square-foot store. This is what Anil Thontepu and Neeraj Menta had set out to do when they founded the company in 2019. The idea was to bring a modern trade-like grocery shopping experience to small-town India a wide assortment of products at a better value.
“There is a cost-efficient world of general trade and a customer-loving world of modern retail,” says Thontepu. “We wanted to see if we can bridge this gap…and do something for the small-town people by bringing the best of both these worlds.”
Over the past five years, the Bengaluru-headquartered startup has opened over 130 stores across 80 towns in Andhra Pradesh. And it doesn’t want to stop there. The company wants to expand to another 300 towns in Andhra Pradesh and nearby states of Karnataka and Telangana over the next 24, months. That’s quite an ambitious target. But the founders believe the market size for Superk is so large that they should be able to build a Rs 2,000-3,000 стоore ($228-342 million) annual business from Andhra and Telangana alone.
To fuel this expansion, Superk raised Rs 100 crore ($11.7 million) in Series B funding last month. The round, led by Binny Bansal’s 3STATE Ventures and CaratLane founder Mithun Sacheti, valued Superk at 2-2.5x its previous valuation of Rs 160 crore (about $18.25 million) in 202/
Now, Superk is not entirely unique. It competes with startups like Frendy, Apna Mart and Wheelocity, which are also trying to organize the retail market in India’s smaller towns. What sets SuperK apart is its larger, bolder approach. Grocery chain Apna Mart, for instance, runs franchisee stores in tier-2 or tier-3 markets and also offers 15-minute home delivery, SuperK’s focus is only on supermarkets. Frendy operates mini-marts and micro-kiranas in villages and towns with fewer than 10,000 people, but SuperK targets small towns with populations between 20,000 and 500,000. And Wheelocity supplies only fresh produce to rural areas, while Superk sells dry groceries as well as packaged consumer goods.
This rather radical shift in focus-away from tier-1 and tier-2 cities-ties in with India’s changing consumption pattern. “Consumer mindsets are changing even in smaller cities,” says Devangshu Dutta, founder and chief executive of Third Eyesight, adding that these consumers are beginning to favour more modern retail environments. And NielsenIQ’s latest report says rural markets in India grew twice as fast as cities between April and June 2025.
In this landscape, SuperK fits like a glove, with its franchise-first approach. Thanks to an asset-light model, the company has the agility to go deeper into smaller towns.
But it won’t be all that easy either. As Dutta says, “Changing grocery habits is a long, capital-intensive game.” Moreover, big retail chains are also jumping on the bandwagon. Hypermarket chain Vishal Mega Mart, for instance, already operates 47% of its stores in tier-3 cities and plans to expand into cities with populations exceeding 50,000. Supermarket chain operator DMart is also focusing on tier-2 and tier-3 cities.
However, Superk founders believe they are prepared for the challenge. Menta says the startup has arrived at a business model that is scalable, sustainable and, more importantly, offers value to its customers.
It’s too early to say whether they will be successful in this endeavour. That said, SuperK appears to have built a smart retail business for small-town India.
Refining small-town retail
SuperK’s founders have drawn inspiration from domestic and international retail chains like DMart and Costco. But they haven’t duplicated their strategies and made their own tweaks instead. For instance, large retail chains usually run company-owned and company operated, or COCO, stores. Though this approach is more cost-intensive than the franchise model, it allows a company to ensure a uniform customer experience across all outlets:
Superk doesn’t do that. It runs only franchise-owned and franchise-operated (FOFO) stores, which are no bigger than 800 sq ft. The company is not the first to have experimented with this model, but Thontepu believes that everyone else before them “did not try with the right spirit”. A franchise-owned store, argues co-founder Menta, is run differently from a company-owned store one has to keep in mind the store owner’s incentives, needs and concerns.
Under the franchise model, entrepreneurs invest between Rs 12 lakh (about $13,690) and Rs 15 lakh (about $17,110) to set up a Superk store. Of this, Rs 4 lakh (nearly $4,560) is spent on the store fit-out and infrastructure, the rest goes towards buying inventory. These stores, according to Menta, typically achieve a breakeven point after six months. On average, a retail store takes longer than that-12-15 months to reach breakeven.
Superk fills the shelves by procuring its inventory directly from brands as well as distributors. “The inventory is recommended by us through a mobile application. Store owners have an option to make certain changes within the limits that we have set for them,” says Thontepu. Revenue is shared and the model is similar to the one followed by nearly all retailers in India. Franchisees earn varying levels of margins on different kinds of products, depending on how easy or tough it is to sell those items. For instance, staples like dal and rice have lower margins, while confectionary items and products that need greater effort to sell enjoy higher margins of up to 20%.
In addition to this, there’s a private label business, especially loose items like pulses. In fact, private labelling is part of the company’s efforts to bring some standardization in India’s unorganized retail market. “A customer coming to our store should be able to blindly expect consistent quality on the product they’re buying,” says Menta. “We have organized our sourcing, processing, cleaning, packaging, testing. Everything that a brand would do to provide a great-quality product to their customer.”
Unlike distributors or other retailers who operate franchise models though, Superk claims that it does not dump its inventory on store owners. Menta says the franchise structure is designed in a way that Superk does not benefit from selling unnecessary stock to store owners. “If I lose, he will lose. If he loses, I lose. That is the way (the structure) is created. We, in fact, recommend owners to remove some products if they are not selling.” says Menta.
On the customer side of things, Superk’s value proposition comes down to offering the best prices. More than a year ago, for instance, it introduced a membership programme that offers customers cashback that is redeemable on their future purchases. “If they pay Rs 300 [approximately $3.5) for a six-month membership, they get 10% cashback on all purchases that they are making up to Rs 300 every month,” explains Thontepu. He says 35-40% of Superk’s more than 500,000 customers are enrolled in this programme.
All of this sounds good even promising in theory. But will it be enough to build a sustainable and scalable retail business?
A long, hard look
Let’s first look at what really works in SuperK’s favour.
One, the focus on selling staples under a private label brand. This has been done successfully before. One example is Nilgiri’s, one of India’s oldest supermarket chains.
Founded in 1905, Niligiri’s operated under a franchise model and sold dairy, baked goods, chocolates and other items produced under its own brand. The supermarket chain was sold by debt-ridden Future Group for Rs 67 crore ($7.65 million) in 2023, less than one-third the price the latter paid to acquire the company from private equity firm Actis in 2014. However, its history is worth learning from.
Shomik Mukherjee, a Delhi-based consumer goods advisor who was a partner at Actis while the firm was in control of Nilgiri’s, recalls the value proposition created by Nilgiri’s private label products. “In the case of private labels, it is essential for a company to have a reason why people will walk into that store. For Nilgiri’s, it was bakery and dairy products,” says Mukherjee. Owning a private label that brought in customers also ensured that franchisee owners had incentives to continue working with Nilgiri’s. “It is about giving the franchisees a safe portfolio of private label goods that are desired by customer instead of something that is shoved down the franchisees’ throat to derive margin,” he says.
You see, the overall grocery business operates on a very low margin. But private labelling, says Satish Meena, founder of Datum Intelligence, offers the highest margins – 35-40% – in the grocery business, after fresh produce, making it a lucrative business to get into.
Superk, which sells essential items through its private label, has the opportunity to earn better margins in grocery retail. More importantly, private labelling holds the potential to become SuperK’s identity and boost customer retention and loyalty.
Two, SuperK’s franchise model allows it to expand to more locations rapidly as compared to a regular modern trade chain with company-owned stores, says Mukherjee. This model makes SuperK’s business asset-light and brings down the cost of running a network of stores. “Under this model, the franchisor does not incur the upfront cost of opening a store or having to deal with the trouble of hiring and replacing store managers,” he adds. Since most store owners in a franchise model are landowners, there is a greater stability in operations as well, he explains. Moreover, Superk stores are quite small (800 sq ft), allowing easier availability of property.
The franchise model, however, is not entirely foolproof. One of the inherent problems is the difficulty in implementing standard operating procedures (SOPs) across all stores. And the problem only worsens as the company expands operations to different cities. While Superk stores boast a no-frills fit-out that can be easily set up anywhere, how these stores are maintained through the wear and tear over the years is yet to be seen.
A bigger fear is that the store owner may start running their own store without the Superk branding. “If Superk loses the franchisee owner, it also loses the location in which the store was operating,” says Mukherjee.
Moreover, most franchisee owners in the retail business typically tend to be experienced general store owners who might not be willing to adopt new technology. “Since they have run a store before, they think they know how and what to order for inventory and may not follow SuperK’s tech-enabled recommendations,” says Mukherjee.
There’s another problem. While the founders claim to have seen considerable success (35-40% sign-ups) in the rollout of SuperK’s membership programme for customers, Third Eyesight’s Dutta raises concerns about its future growth. “Indian consumers’ price sensitivity limits membership fee potential,” he says. According to him, the programme’s value in the tier-3 market lies more in customer acquisition and retention than direct revenue generation. “Long-term success requires a cashback programme to drive purchase frequency and basket size increases to offset the costs,” says Dutta.
Menta, however, has a different view. He says SuperK’s subscription is designed in a way that benefits customers only when they make full basket purchases. Moreover, the company has different pricing slabs for membership depending on the various basket sizes, which makes the model more viable. Considering the programme is a little more than a year old, it is still too early to judge whether it will find a lot of takers in small towns.
For now, the founders are in no hurry to expand their business across India. “There is no reason to go into five states. Then, you are spread thin and your economics will not work out. It’s a business of managing operations at a very low cost,” says Menta. The plan is to stick to one region and continue to go deeper into it. “A lot of our competitors who started five years ago spread to so many places that it became very difficult for them to manage,” he adds.
This is also the crux of how Thontepu and Menta are building SuperK. By implementing what they have learnt not only from their own experiments, but also from the failures and successes of other businesses. While there’s no guarantee that Superk will become a roaring success, it does appear to have set an example by starting small and growing patiently. And if the latest funding is any proof, investors are interested.
(With inputs from Neethi Lisa Rojan)
(Published in The Morning Context)
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December 14, 2024
Sagar Malviya, Economic Times
Mumbai, 14 December 2024
Fast fashion was on a slow lane in the last fiscal year. Sales growth slowed for top retailers and fast fashion brands, show the latest regulatory filings of Marks & Spencer, Zara, H&M, Levi’s, Lifestyle, Uniqlo, Benetton and Celio. The bottom line too had taken a hit, with most brands posting lower profits in the fiscal year ended March 31. Sales growth of H&M and Zara fell from 40% in FY23 to 11% and 8% in FY24, show the filings with the Registrar of Companies. Levi’s growth slowed to 4% from 54% in FY23, while that of Uniqlo halved to 31% from 60%.
The current year is not looking good either, as sticky inflation and stagnant income weigh on consumer spending on discretionary products, say experts.
Devangshu Dutta, founder of retail consulting firm Third Eyesight, said the job market has been under pressure and slower income growth for urban consumer impacted demand, a trend likely to continue even during FY25.
“There is a visible slowdown led by the urban middle class who buy branded products. These brands have been targeting young upwardly mobile consumers, who are tightening the purse strings due to the current economic circumstances of hiring slack and fewer jobs,” said Dutta. “The situation is not hunky-dory at all, and this will continue over the next few quarters.”
Being the world’s most populous country, India is an attractive market for apparel brands, especially with youngsters increasingly embracing western-style clothing. But most international and premium brands have been competing for a relatively narrow slice of the population pie in large urban centres.
Over the past few years, top global apparel and fast fashion brands struck a strong chord with young customers, racking up sales growth of between 40% and 60% in FY23, bucking the trend in a market where the overall demand for discretionary products started slowing down. This has reversed now.
Consumers started reducing non-essential spending, such as on apparel, lifestyle products, electronics and dining out since early last year due to high inflation, increase in interest rates, job losses in sectors like startups and IT, and an overall slowdown in the economy.
According to the Retailers Association of India (RAI), sales growth in organised retail segments such as apparel, footwear, beauty and quick service restaurants halved to 9% last year and slowed further to about 5% in the first six months in the current fiscal year. This slowdown came after a surge in spending across segments-from clothes to cars-in the post-pandemic period, triggered by revenge shopping.
“The base post-pandemic was extremely high, and that kind of growth is not sustainable as there is nothing spectacular in economy to drive demand,” said Kumar Rajagopalan, chief executive officer at the RAI that represents organised retailers. “Our bet was on the festive and wedding season, but we will have to wait and watch until next year for the performance numbers,” he said.
(Published in Economic Times)
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October 7, 2024
Writankar Mukherjee, Economic Times
7 October 2024
Reliance Retail has initiated efforts to enter the thriving quick commerce market in a move that is set to escalate competition for Zomato-owned Blinkit, Swiggy Instamart and BigBasket, among others. The country’s largest retailer has started offering quick commerce services in select areas in Navi Mumbai and Bengaluru through its ecommerce platform JioMart since last weekend.
It will initially sell grocery items from its retail stores totalling about 3,000 nationwide, eventually adding value fashion and small electronic products such as smartphones, laptops and speakers, a senior executive said. All orders will be fulfilled from its own network of stores including Reliance Digital and Trends.
The retail arm of Reliance Industries plans to rapidly scale up its quick commerce venture pan-India by this month-end with the aim to deliver most orders in 10-15 minutes and the rest within 30 minutes, the executive said. The company will use its acquired logistics service Grab for the fulfilment.
Reliance, however, doesn’t have any plan to set up dark stores or neighbourhood warehouses, unlike other quick commerce operators, the executive said. Analysts said this may become a challenge in delivering orders within 30 minutes in large cities where traffic is high during peak hours.
To entice customers, Reliance won’t charge any delivery fee, platform fee or surge fee irrespective of the order value, and keep a major focus on untapped smaller cities and towns where quick commerce operators like Blinkit are yet to enter, the executive said. Other platforms have a delivery fee and platform fee.
Reliance plans to offer a wider choice of products of 10,000-12,000 stock keeping units by linking its entire store inventory to the quick commerce business, which too is much more than rivals.
Eventually, the company aims to cover 1,150 cities spanning 5,000 pin codes where it runs grocery stores. The executive said the company would target a bigger share of business from towns and smaller cities hitherto untapped by quick commerce firms.
“Reliance has reworked the way orders are delivered for JioMart. Earlier, orders had a scheduled delivery taking 1-2 days by small trucks who would take multiple orders and deliver them one by one. Now, all grocery orders will be quick commerce where one delivery bike or cycle will deliver one order. Each grocery store will cover a 3 KM radius,” the executive said.
Earlier this year, the company tried to reduce JioMart delivery timings to a few hours or at least the same day under its hyperlocal initiative. It has fine-tuned the process further to 10-30 minute delivery. “This has become a top-of-the-kind requirement in the market right now,” the executive said.
A spokesperson for Reliance Retail didn’t respond to ET’s queries.
Devangshu Dutta, chief executive at consulting firm Third Eyesight, said Reliance can ultimately use a blended approach of quick commerce deliveries in areas near its stores and scheduled deliveries a bit far away.
“Since they are in a market share acquisition mode in quick commerce, charging no transaction fees and offering higher discounts on products is a given. There is significant scope for deep-pocketed players like Reliance to strengthen presence in quick commerce. They have aggressively backed other experiments in the retail business once they worked, and may do it again,” said Dutta.
For fast-moving consumer goods companies, quick commerce is the fastest growing channel, accounting for 30-35% of total online sales.
(Published in Economic Times)
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August 19, 2024
Ratna Bhushan, Economic Times
New Delhi, 19 August 2024
Close to a dozen small to mid-sized global cafes and restaurant brands have either entered India in the past two quarters or are in talks with local players at a time when large global chains are seeing sharp decline in same store sales and growth.
Mid-sized global chains are making investments even in a modest range of Rs. 20-30 crore to tap select cities and intend to keep store counts under about 30 to stay profitable on each store. This is in contrast to earlier times when cafes and chains entered India with mega deals and investment plans, executives said.
Belgian bakery Le Pain Quotidien, French patisserie chain Laduree, UK’s JD Wetherspoon and Frank HotDogs are among those to have inked collaborations with Indian partners, while newer homegrown ones such as Harley’s, Paper & Pie, abCoffee and First Coffee are expanding with first-time investors and mid-rung store rollouts.
“A combination of factors is driving this change of newer, smaller launches,” said Devangshu Dutta, chief executive of retail consultancy Third Eyesight. “There are niches the newer chains are addressing as consumers’ choices evolve and get more specific. Also, there’s a broadening of a wealth base in India leading to mid-sized business houses having capability to invest and willingness to try out newer segments,” he said.
With the big-bang launches in food services drying up, there’s been a mushrooming of small deals that is expected to surge.
Bake & Brew, which has inked a master franchise agreement with Belgian bakery chain Le Pain Quotidien to re-enter India, is investing Rs 35 crore in the first year. “We’ll start in metros and may expand to smaller towns later. We also see potential in travel retail, airports and larger train stations,” Annick Van Overstraeten, chief executive of Le Pain Quotidien, told ET. Bake & Brew is backed by the Nalanda group with core business interests in automotive metal parts.
Earlier this month, the French patisserie chain Laduree said it was launching its cafe at Ritz-Carlton, Pune, in collaboration with CK Israni Group which has business interests in home decor and construction. Its Managing Director Chandni Nath Israni said in a statement that the CK Israni group planned to expand Laduree’s presence across other Indian cities.
Experimenting in newer cuisines is also driving the change. “Our decision to expand in India stems from a deep appreciation for variety and a passion for bold flavours. We see great potential in the Indian market,” said Benjamin Attal, founder of US chain Franks Hot Dog.
Smaller and newer homegrown chains, in contrast, are expanding, backed by mid-ticket investors and business houses, many of whom are foraying into food services for the first time.
Last week Brigade Group, a realtor, announced a partnership with specialty coffee chain abCoffee to set up six outlets within Brigade properties.
“We partnered with abCoffee to enhance the F&B offerings at our office parks. abCoffee is able to retrofit into operational buildings without requiring additional water or gas points,” Arvind Rao, vice president – commercial business, Brigade Group, said.
Specialty coffee startup First Coffee plans to open 35 stores by 2024-end “focused on delivery and minimalist store aesthetic,” according to a company statement, to sell flavoured coffees, cold brews and bubble teas.
(Published in Economic Times)
