India's D2C Market Thrives with 66% New Orders from Tier 2 and 3 Cities in FY26
India's D2C growth powered by Tier 2, 3 cities with 66 per cent new orders in FY26
The Economic TimesImage: The Economic Times
India's direct-to-consumer (D2C) market is experiencing significant growth, with Tier 2 and 3 cities accounting for 66% of new orders in FY26. The overall D2C segment saw a 33% rise in order volumes, indicating a shift in online shopping dynamics beyond metropolitan areas.
- 01Tier 2 and 3 cities contributed 66% of new orders in FY26.
- 02The D2C segment experienced a 33% increase in order volumes compared to FY25.
- 03The market is projected to grow from USD 10-12 billion to USD 60 billion by 2030.
- 04Return-to-origin (RTO) rates improved from 39% to 21% by February 2026.
- 05Technology, including AI, is enhancing customer engagement and personalization.
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India's direct-to-consumer (D2C) market is rapidly evolving, with Tier 2 and 3 cities now driving growth by contributing 66% of new orders in the financial year 2025-26 (FY26). This marks a notable shift in consumer behavior, as these smaller markets accounted for 60% of the incremental Gross Merchandise Value (GMV) compared to the previous fiscal year. Overall, the D2C segment saw a 33% rise in order volumes and a 32% increase in GMV over FY25, as reported by Unicommerce. The D2C market, currently valued at USD 10-12 billion, is expected to reach USD 60 billion by 2030. Improvements in delivery metrics have also been observed, with return-to-origin (RTO) rates decreasing significantly from 39% during the festive period in November 2025 to around 21% by February 2026. This decline is attributed to better delivery processes and order verification. Furthermore, the integration of technology, such as AI-driven recommendations, is enhancing personalized shopping experiences for consumers.
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This growth in the D2C sector means more job opportunities in logistics and retail for residents of Tier 2 and 3 cities, as brands expand their operations to meet rising demand.
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