India’s smaller cities are emerging as the primary growth engine for direct-to-consumer (D2C) brands, with Tier-2 and 3 markets accounting for nearly two-thirds of new orders in the financial year 2025–26, according to a report by Unicommerce.
The report highlighted a notable shift in the country’s online shopping landscape, as consumers beyond metropolitan areas increasingly drive demand. Buyers from these markets contributed approximately 60% of incremental gross merchandise value (GMV) in FY ’26 compared with the previous financial year, indicating a broad-based expansion in digital commerce adoption.
Overall, India’s D2C segment maintained strong momentum during the period, recording a 33% increase in order volumes and a 32% rise in GMV year-on-year. The findings suggest that the sector continues to scale rapidly, supported by deeper market penetration and rising consumer confidence across non-metro regions.
The report estimated the current size of India’s D2C market at between US $10 billion and US $12 billion, with projections indicating significant long-term growth. The market is expected to expand to approximately US $60 billion by 2030, reflecting increasing digital adoption and brand-led distribution strategies.
As geographic demand widens, operational efficiencies are also improving. Data from Shipway, a logistics platform owned by Unicommerce, showed that return-to-origin (RTO) rates declined to around 21% by February 2026, compared with nearly 39% during the festive season in November 2025.
Unicommerce stated that the post-festive decline in RTO rates was driven by sustained improvements in delivery processes, stronger order verification mechanisms and more efficient execution. The company noted that these measures helped mitigate typical festive-season challenges, such as higher order volumes, an influx of first-time buyers and greater reliance on cash-on-delivery (COD) transactions.
The report also underscored the growing role of technology in shaping the D2C ecosystem. It stated that artificial intelligence-led recommendations and chat-based interactions are increasingly enabling brands to deliver more personalised consumer experiences, from product discovery through to post-purchase engagement.
The analysis was based on more than 400 million order items processed through brand websites via Unicommerce’s Uniware platform between April 2024 and February 2026.
