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Table of Contents

Foreword ....................................................................................................................... 1
Chapter 1: India’s D2C market is poised for rapid growth ......................................... 3
1.1 Favourable macros will drive consumption growth ...........................................................3
1.2 Massive opportunity for mass & premium brand creation ............................................. 6
1.3 New age / D2C brands have leveraged online to challenge incumbent brands ....... 8
1.4 The next phase of D2C brands will be marked by 3 major themes ............................... 11
Chapter 2: D2C brands have thrived with the rise of a rich enabler ecosystem..... 14
2.1 D2C brands’ challenges evolve as they scale and mature ............................................ 14
2.2 E-commerce enablers support D2C brands accelerate their growth journey ........ 17
2.3 Logistics represents a major opportunity for D2C brands to differentiate on user
experience ...................................................................................................................................... 19
Chapter 3: A new-age logistics landscape for new-age brands .............................. 20
3.1 D2C brands have specialized logistics needs ................................................................. 20
3.2 A variety of options have emerged for D2C brands ...................................................... 22
3.3 D2C brands have relied on aggregators as a one-stop solution ............................... 23
3.4 3PL providers are innovating to cater to the needs of D2C brands .......................... 24
3.5 3PL players dominate the logistics landscape, with a few players emerging as clear
winners ........................................................................................................................................... 26
Glossary ...................................................................................................................... 27
Research Methodology............................................................................................... 28
Disclaimer.................................................................................................................... 29
About the Authors ...................................................................................................... 30
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Foreword

Anil Kumar
Founding Partner, Redseer Strategy
Consultants

In recent years, India's direct-to-consumer (D2C) landscape has experienced remarkable

growth, driven by heightened private consumption. This surge in consumption has given rise
to two distinct yet interconnected consumer segments: Bharat and India. These segments
are at the forefront of driving increased demand, shaping the narrative of D2C businesses.

As new-age D2C brands continue to expand, they encounter heightened operational

complexities, with logistics standing out as a significant challenge. Logistics not only
represents a substantial cost component for these brands but also directly influences the
customer experience. Establishing efficient logistics operations while keeping costs low is
therefore a crucial objective for these brands.

In this report, we delve into the evolving dynamics of the D2C landscape, with a particular
focus on how brands navigate the complexities of logistics. Third-party logistics enablers
emerge as indispensable partners in facilitating the growth journey of D2C brands, offering
cost-effective solutions tailored to their specific needs.

Join us as we explore how D2C brands leverage logistics partnerships to enhance their
operational efficiency and deliver exceptional experiences to their customers.

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2
Chapter 1: India’s D2C market is poised for rapid growth

1.1 Favourable macros will drive consumption growth

India is the fifth-largest economy in the world with a nominal GDP of US$ 3.6 Tn in 2023. With
a nominal GDP growth of approximately 9%, India is one of the fastest growing economies
globally.
This growth has been fuelled by:

• Increased Capital Formation: India has seen significant uptick in capital formation
and currently ranks 4th in the world. In 2021, capital formation was US$ 0.98 trillion
and by 2022, it had surged to US$ 1.106 trillion. This has led to increase in production
capacity and consequent demand.
• Consumption enabled by demographic dividend: India is home to one of the largest
young populations in the world, with an estimated 970 Mn people in the age bracket
of 15-64 years. The median age of Indians is about 28.2 years in 2023, while that of
developed countries like USA and UK is about 38.1 and 40.1. This demographic
dividend drives economic growth through increased labour force, higher incomes
and savings, and increased consumption.
• Rapid urbanization: India hosts a large urban population, second only to China, with
an estimated 37% (528 Mn) of the population people living in cities & towns as of
2023. As per Niti Aayog’s estimates, this is expected to increase to 50% by 2050.
Urban areas, characterized by relatively higher-income residents serve as hotspots
for economic activity, driving consumption and thereby economic growth.

This has led to an increase in Private Final Consumption Expenditure (PFCE) in India. PFCE
grew at a CAGR of over 10% from US$ 1.2 Tn in FY18 to US$ 2.0 Tn in FY23. Consumption is a
major contributor to the economy with a share of 61% of the total GDP.

It has been observed in mature economies that crossing the GDP per capita mark of US$
2000 has signalled an inflection point in the growth of PFCE. Having crossed the GDP per
capita of US$ 2000 in 2021, it is expected that India will observe a similar surge in PFCE and,
consequently, discretionary spending.

3
Exhibit 1
Growth Drivers of GDP in India

Note(s): 1. E- estimated, P-projected,

Source(s): Economic and Social Commission for Asia and the Pacific (ESCAP), World Bank, Niti Aayog, Redseer analysis

4
Exhibit 2
GDP per capita (Current Prices) vs Consumption expenditure per capita

Note(s): 1. The PFCE has been represented respective to the GDP per capita for the first time that the respective economy
reached that particular level. 2. Data for FCE per capita for UK has been extrapolated when GDP per capita crossed 0.5k
Source(s): World Bank, Redseer analysis

5
1.2 Massive opportunity for mass & premium brand creation

In the last decade, two distinct consumer classes have emerged: Bharat & India. Of course,
this is an oversimplification of a very complex customer landscape. However, it is useful to
look at Bharat as the aspirational, newly created middle class, and India as the high-income
affluent class.

Bharat: The increase in income-levels across the country has led to an upward movement in
household incomes and consumption. Redseer estimates indicate that aspirational
households, which includes the lower middle-class (annual household income of US$ 3600-
9600) and upper-middle class (annual household income of US$ 9600-13250), will grow at
a CAGR of 2% and 6% respectively from 2023-28, accounting for a total of 57% of the
households in 2028. This evolution of Bharat from low-income households to the emerging
new middle class is expected to drive the demand for mass brands that cater to the quality
as well as cost requirements.

India: According to Redseer estimates, high-income households (annual household income

of US$ 13250+) are projected to grow at a CAGR of 7% between 2023 and 2028. The rise in
incomes and an upward movement in household pyramid signal a boost in discretionary
spending. Additionally, these affluent households account for 10% of the total PFCE,
highlighting their greater purchasing power and reflecting their increased potential to invest
in luxury and premium goods and services. Assured quality and the ability to customize and
provide sense of exclusivity has driven these affluent households towards luxury and
premium goods and services. Exposure to global trends and lifestyles too further catalyses
the increasing awareness of the luxury and premium goods.

Exhibit 3
Household Income Pyramid – India
2018, 2023, 2028P

Note(s): 1. Annual household income range: High-income (US$ 13250+), Upper-middle class (US$ 9600-13250), Lower-
middle class (US$ 3600-9600), and Low-income (<US$ 3600)
Source(s): Redseer estimates

6
As the consumer landscape evolves, brands have the opportunity to meet the escalating
demand on both ends of the price spectrum. A major portion of this evolution is taking place
in the digital world, with consumption increasingly moving to online channels.

We believe that online consumption is increasingly democratized with equitable

representation of socio-economic shoppers – NCCS A, B and C – across categories. On the
other hand, this is skewed in favour of the affluent NCCS A households’ shoppers. As habit
building the aspiring lower middle-class shoppers find their internet feet, we expect their
shopping wallet to shift online.

Exhibit 4
Category-wise ATU split by NCCS
In Mn, 2023

Note(s): NCCS is given on the basis of (i) Education of the chief earner and (ii) Number of consumer durables (from a pre-
defined list) owned by a household. The list contains 11 items including – electricity connection, ceiling fan, LPG Stove, two-
wheeler, colour TV, refrigerator, washing machine, personal computer/laptop, car/jeep/van, air conditioner, agricultural land
Source(s): Redseer analysis

7
1.3 New age / D2C brands have leveraged online to challenge incumbent brands

New age or D2C brands identified the digital opportunity before large incumbent brands and
created products to service niche customer use-cases. Leveraging digital platforms and
data analytics, these insurgent brands have disrupted and gained significant scale.
Consequently, incumbent brands have acknowledged the shifting consumer dynamics and
adapted their strategies to identify the same underexplored market segments.

D2C brands distinguish themselves by providing superior services, personalized care, and
meticulous attention to detail, setting them apart from traditional retail models. Therefore,
for brands aiming to capture India's expanding consumer market and shape the retail
landscape, D2C emerges as a strategic choice.

Between 2019 and 2023, the D2C market experienced significant growth of >40% CAGR. We
anticipate this momentum to continue, with the D2C market projected to reach a value of
$50 billion by 2028.

Exhibit 5
Indian D2C1 Market Opportunity (GMV)
US$ Bn, CY19-28P

Note(s): 1. D2C or Direct-to-consumer companies/brands are independent companies/brands which have 50%+ revenue from
online channels and have own website /app. 2. The market size here includes online and offline revenues of the D2C brands.
Source(s): Redseer IP

D2C brands are experiencing a growth rate double that of e-tailing. This difference arises
from the expansion of the middle and high-income consumer segments. While the former is
still early to the online shopping game, D2C brands have evolved largely to cater to the latter.

8
High-income customers place a higher emphasis on convenience, and personalized
interactions — avenues where D2C brands outshine conventional e-commerce platforms.

Exhibit 6
Retail growth projections (2023-2028P) comparison

Source(s): Redseer analysis

With D2C brands been around for more than a decade now, go-to-market strategy
playbooks have been well established. D2C brands look for the right channel mix based on
their category and scale.

Exhibit 7
Channel Convergence for D2C brands

Note(s): While D2C is a channel, we use the word to loosely represent new-age brands who may or may not use direct channels
to access their customers.
Source(s): Redseer analysis

9
Exhibit 8
Differences between Channels
Parameter Offline e-Commerce Platforms D2C

Brand Limited control, relies on Brands create own Full control from
Control retailers storefront, control marketing to product
product presentations delivery

Margins Low to Moderate Lowest, but includes Highest

cost of advertising and
logistics

Data Access No data with delayed Detailed dashboards Detailed dashboards

feedback loop with access to with access to
aggregated sales data aggregated sales data

Customer Limited to no Limited access to Personalized

Relationship engagement, possible customer data, communication, strong
through physical engagement through customer relationships
salespersons platform ads
Source(s): Redseer analysis

10
1.4 The next phase of D2C brands will be marked by 3 major themes

New-age brands are achieving business milestones at an accelerated pace as compared to

their traditional counterparts. This exponential growth is influenced by three key themes,
each playing a significant role in the creation and expansion of these brands:

Exhibit 9
Next big themes for D2C brands

Source(s): Redseer analysis

Convergence of online channels. Online platforms that were once specialized in specific
verticals are now transforming into comprehensive hubs, offering a wide range of categories
beyond their initial focus. This is highlighted by the rise of quick commerce services, which
are expanding their offerings beyond food and groceries to include electronics, home décor,
and other categories. For example, Blinkit now carries products like the PlayStation 5 Slim,
illustrating its evolution into a versatile marketplace catering to diverse consumer needs.

Similarly, data availability has expanded in both online and offline retail, there is increasing
scope for translating learnings from one channel into another.

11
Rise of Massification & Premiumization. India is witnessing a growing demand for branded
products, characterized by rising incomes and elevated expectations on quality.
Urban India is driving the premiumization trend in D2C. These consumers seek immersive
and memorable shopping experiences and specialized products, prioritizing faster delivery,
niche platforms catering to specific needs (such as home or kids). GenZ, a unique consumer
cohort, seeks products reflecting their individuality and values. They reject traditional
options, preferring sustainable, cruelty-free, and individualistic products that align with
their identity. In response, brands are adapting to the evolving preferences of these
consumers.

For instance, Brands such as NewMe and 82E are tapping into this trend by offering premium
products and personalized experiences. Beauty brands are focusing on sustainable and
cruelty-free products, while fashion brands are embracing inclusivity and individuality.

Concurrently, a variety of D2C brands are catering to a more value-conscious customer.

These are tapping into the “masstige” opportunity, which offer a balance between
affordability and perceived quality. This marks a shift from unbranded to branded products
in consumption landscape in India.

Alternative Brand Creation. How D2C brands look at offline is undergoing a transformation
as brands with revenue <INR 50 crore, are rapidly entering offline channels. Departing from
“conventional” practice of online brand building, this shift aims to capitalize on the
advantages of a physical presence, including wider market reach and lower acquisition
costs resulting in accelerated sales growth. This enhances brand visibility and fosters
stronger consumer relationships through localized interactions, ultimately driving traction
online.
However, the value that this transition unlocks is largely category dependent. This trend is
observed in food & beverages brands which tend to move offline quicker due to the inherent
FMCG nature of the category. For example, True Elements, a digital-first brand, has now

12
placed its products in most modern trade outlets. Beauty and personal care brands are also
increasingly experimenting with offline expansion, as seen in the case of Perfora and Vilvah.

Parallelly, D2C brands are actively embracing quick commerce as a channel for brand
discovery, expanding their market reach. Platforms such as Swiggy Minis or Insanely Good
provide customized areas for brands to exhibit their products, effectively reaching new
potential customers. Such a strategy enables D2C brands to elevate their visibility online
and interact with audiences actively seeking innovative offerings, thereby nurturing brand
awareness, and facilitating customer acquisition.

13
Chapter 2: D2C brands have thrived with the rise of a rich enabler
ecosystem

2.1 D2C brands’ challenges evolve as they scale and mature

D2C operations present varying levels of complexity across the journey to Rs 50 crore, and
then crore. As revenue grows, brands progress from catering to localized markets to
reaching a broader customer base, enhancing market penetration, and gaining increased
control over manufacturing processes.

Stage 1 (Annual revenue <INR 50 Cr) – Early Adopters. The first phase of a brands’ growth
focuses on finding their product market fit and their early adopters, usually through the
online channel. In this phase, brands double down on the channels that are working and find
their hero product.

The first inflection point often arises as brands saturate their early adopters and growth
slows down.

Stage 2 (Annual revenue INR 50-250 Cr) – Extended Customers and Channel Expansion.
This transition involves diversifying channels, extending beyond online platforms to
establish brick-and-mortar retail outlets, and shifting from marketplaces to brand.com or
even quick commerce platforms. Examples include Boat and Mamaearth that expanded
from first selling via marketplaces then expanding to Brand.com, remaining online only to
then being available in offline retail stores, and now further expanding to quick commerce
platforms as well.

The second inflection point arises as brands saturate the market for their hero products and
want to expand their product / brand portfolio.

Stage 3 (Annual revenue > INR 250 Cr) – Scaling and Portfolio Expansion. Brands now want
to access new customer segments. At this stage, growth is propelled by portfolio
expansion, with brands introducing new sub brands and categories. For instance, Vellvette
Lifestyle, the parent company of Sugar Cosmetics, launched a Korean skincare brand,
Quench Botanics in 2023. The brand aims to capitalize on the rising popularity of Korean
skincare products, riding on the widespread influence of Korean pop culture and
endorsements and usage by online influencers.

14
Exhibit 10
Evolution of D2C Brands

Note(s): CM: Contribution Margin, LTV: Lifetime Value, CAC: Customer acquisition cost, ROCE: Return on capital employed
Source(s): Redseer Analysis

Exhibit 11
Non-exhaustive examples of D2C brands across stages

Note(s): Revenue as on March 31st 2023

Source(s): Redseer analysis

15
Exhibit 12
Complexity of D2C brand operations

Source(s): Redseer analysis

16
2.2 E-commerce enablers support D2C brands accelerate their growth journey

A decade ago, the internet was a different place. Brands had to organically build each part
of the e-commerce value chain, from the inception to expansion.

Today, vertical service providers have emerged as a critical factor in simplifying setup and
enhancing operational efficiency. Contemporary brands often choose to outsource
activities like ordering platforms, payment processing, and logistics to third-party providers,
enabling them to focus solely on their core services. At each stage of the value chain, brands
are faced with a wide array of service-provider options to choose from, each offering
specialized services.

This enabler ecosystem has expedited and streamlined the journey of new-age brands from
their creation to growth matching, and in some cases, surpassing the trajectory of their
traditional counterparts. This holistic collaboration is being enabled through the
advancements in vertical third-party players, which enables seamless integration across all
the services in the value chain.

Exhibit 13
Third-party enablers

Source: Redseer Research

17
18
2.3 Logistics represents a major opportunity for D2C brands to differentiate on user
experience

As brands attain scale, they aim to achieve efficiency across all cost components. While
some costs are inevitable while others are highly category-dependent, logistics costs
continue to remain a significant component of most digital-first D2C brands. These costs
encompass various activities including transportation, warehousing, packaging, and
inventory management, typically vary with the scale of brands.

For smaller brands with an annual revenue of INR 50-250 Cr, logistics constitutes 10-18% of
the overall expense, but this tends to reduce to approximately 6-14% as brands attain a
scale of over INR 250 Cr.

This positions logistics costs as the third significant expense following Cost of Goods Sold
(COGS) and Advertising. While COGS primarily hinges on pricing and advertising focuses on
customer acquisition, logistics expenses are directly associated with enhancing the
customer experience. In particular for emerging brands aiming to solidify their presence and
cultivate a loyal customer base, high COGS and Advertising costs become inevitable with a
lower scope for cost reduction. Therefore, optimizing logistics expenses becomes essential
for brands seeking to enhance profitability while providing exceptional customer
experiences.

Exhibit 14
Cost Structure of D2C brands at different Impact of Cost Components
revenue stages
N=20

Note(s): Cost components affecting Contribution Margin-2 have been considered for this analysis, i.e., other costs such as
wage bill, SG&A are excluded.
Source: Redseer analysis

19
Chapter 3: A new-age logistics landscape for new-age brands

3.1 D2C brands have specialized logistics needs

As the demand for D2C products continues to rise, their logistics needs increase in parallel.
Annual D2C originated shipments have surged from ~0.1 billion in 2019 to ~0.6 billion in 2023.

Exhibit 15
D2C shipments volume
In Bn, 2019 – 2023, 2028P

Note 1. D2C shipments include shipments from Brand.com and marketplaces

Source(s): Redseer IP

During most of a direct-to-consumer (D2C) brand’s growth journey, marketplaces serve as

their primary channel. Platforms generally incentivize using their 1PL logistics platforms
(e.g., eKart for Flipkart, and Valmo for Meesho). For brand.com, however, D2C brands want
to find the right balance between cost and customer experience.

Exhibit 16
Fulfilment process for Brand.com

Source(s): Redseer analysis

20
D2C brands want their 3PL partners to solve for a variety of challenges:

• Technology Integration: D2C brands use e-commerce platforms such as Shopify and
WooCommerce to manage their online businesses. Integrating these platforms with
logistics services is crucial for efficient order management. D2C brands seek
seamless integration across their entire tech stack, including warehousing,
inventory management, shipment intelligence, and transportation.
• Warehousing: D2C brands require warehousing solutions that enable efficient
scaling of operations. Shared warehousing solutions offer both flexibility and cost-
effectiveness.
• Transportation: New age brands require comprehensive transportation solutions
across first, mid-, and last-mile services. Emerging brands are volume constrained
and rely on options like Partial Truckload (PTL). PTL allows brands to share truck
space and pay only for the space occupied, making it affordable in the case of goods
that don’t require a Full Truckload (FTL).
• Expedited delivery times: Driven by customer expectations and heightened
competition across all product categories, there’s a rising demand for same-day or
next-day deliveries.
• Value-added services: D2C brands also seek value-added services like returns
handling, customized packaging, predictive analytics, real-time order tracking, MIS
tools, barcode scanning, etc. to streamline their support functions while they focus
on their core activities.

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3.2 A variety of options have emerged for D2C brands

The rapidly growing direct-to-consumer (D2C) market in India has led to the emergence of
specialized logistics providers. These new-age companies offer tailored solutions for
specific supply chain segments, making them crucial partners for young D2C brands. D2C
brands can access advanced logistics infrastructure without the need for significant capital
investment.

Exhibit 17
D2C Focused e-Logistics Landscape (non-exhaustive)

Service
Offering Key Players
Providers

End-to-end logistics
Full stack 3PL
solutions

Unified platform for logistics

Aggregators
services

Same day delivery/ Next day

delivery

Vertical Hyperlocal
Service
Providers Cross-border logistics

SaaS

Source(s): Redseer analysis

22
3.3 D2C brands have relied on aggregators as a one-stop solution

Aggregators are intermediaries that integrate various logistics service providers onto a
unified platform, connecting them with businesses. Aggregators cater to businesses with
smaller shipment volumes – D2C brands, SMEs, and local businesses – which do not have
the scale to partner with 3PL providers directly. For these services, aggregators will typically
charge a premium to the rates available with 3PL directly.

Exhibit 18
Delivery process through an aggregator

Source(s): Redseer analysis

Despite a cost disadvantage, D2C brands typically choose to partner with aggregators for
the following reasons:
• Consolidation of services: Aggregators offer services beyond transportation. They
offer a full suite of services, including warehousing, shipping software, packaging,
and marketing. By seamlessly integrating with brands’ tech stacks, aggregators
improve order management and enhance the overall customer experience. For
newer brands concentrating on core functions, aggregators provide an accessible
entry point to non-core support services.
• Access to multiple 3PL providers: Aggregators provide access to various shipping
carriers and adjacent services, enabling brands to choose the best options through
price comparison and peer reviews for different product categories and customer
requirements without having to negotiate separate contracts. This flexibility lowers
the risk for new-age brands, allowing them to adapt quickly as their business needs
change.

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3.4 3PL providers are innovating to cater to the needs of D2C brands

3PL providers offer end-to-end outsourcing solutions for logistics and supply-chain
management, inclusive of warehousing, order and warehouse management systems and
inbound and outbound logistics.

Traditionally D2C brands preferred to partner initially with aggregators owing to their tech-
integration capabilities and one-stop solution approach. Upon attaining scale, these brands
often negotiated contracts directly with 3PL providers. However, there is now a significant
shift in strategy among new-age D2C brands which are increasingly collaborating directly
with 3PL providers from an early stage. This shift is driven by the need for better operational
control and attaining cost efficiencies and is being enabled by proactive measures from 3PL
providers that acknowledge the dependency of these new age brands on them. Some of the
services offered by 3PL providers to enhance engagement with D2C brands include:

Tech-stack for brand.com

• 3PL players offer integrated technology solutions, crucial for young brands using
multiple software across their value chain. They provide integration across OMS and
WMS, essential for optimizing the operations for young brands.
• 3PL providers are investing in technology and infrastructure to offer expedited
shipping options, same-day or next-day delivery services, real-time tracking, non-
delivery reports (NDRs), data-driven RTO predictors, better returns experience etc.

SLA parity between brand.com and marketplaces

• 3PL providers are maintaining consistency in SLAs including uptime, delivery times,
response, and claim resolution times, among other factors, across both brand.com
and various marketplaces. This ensures a uniform brand experience for consumers
regardless of where the order originates- marketplaces or emerging brand websites.

Favourable SOPs for new age brands

• Young D2C brands often have a high rate of COD (cash-on-delivery) shipments,
typically until they establish customer trust. Recognizing the importance of
individual payments for the working capital of smaller brands, 3PLs provide
favourable COD solutions, ensuring quick and easy remittance of cash collected
(typically within 48 hours)
• 3PL players are also adapting to the varying weight specifications of new age brands,
accommodating shipments of various weights and sizes.

24
Facilitating offline expansion of young D2C brands

• 3PL partners enable D2C brands to extend their reach into offline markets by
providing part-truck and full-truck load solutions and streamlining distribution.
• By centralizing last-mile logistics and coordinating distribution, 3PLs simplify the
expansion to offline sales channels for D2C brands.

Superior account management and servicing experience

• 3PL offers personalized account servicing experience to brands, particularly in the

case of dispute management, which leads to enhanced customer experience. They
offer convenient dispute resolution by facilitating direct communication with brands
for any issues encountered during the delivery process.

25
3.5 3PL players dominate the logistics landscape, with a few players emerging as
clear winners

For new age D2C brands, selecting the right partners and services is vital for achieving
operational efficiency and delivering exceptional customer service. To excel in these areas,
brands need support from third-party logistics (3PL) providers across seven core areas. The
brand and customer experience are influenced by factors such as shipment protection,
returns management, account management, technological capabilities, and
comprehensive service offerings provided by the logistics partner. On the other hand,
operational efficiencies can be assessed using metrics such as reach and availability, time
reliability, and pricing offered by the 3PL providers. Together, these metrics form a
comprehensive framework for evaluating the suitability of logistics providers in meeting the
essential needs of these brands, with companies like Delhivery and Blue Dart delivering
exceptional service across both experiential and operational dimensions.

Exhibit 19
3PL ratings by D2C brands

Note(s): 1. Based on survey results of N=62 D2C brands with annual revenue < INR 50 Cr.,conducted in May 2024 2.Results
are directional and include error margin of +/- 10% at 90% confidence interval. 3.Methodology details are mentioned in
“Research Methodology” section.
Source(s): Redseer analysis

3PL providers are continuously innovating to offer value beyond mere order fulfilment. With
the rapid expansion of the D2C market, effective logistics are essential for enhancing
customer experience and ensuring operational and cost efficiencies. Rather than serving
solely as support partners, 3PLs are revolutionizing how brands operate and connect with
their customers in the fast-paced D2C landscape.

26
Glossary

Term Definition

D2C D2C or Direct-to-Consumer companies/brands are independent

companies or brands which have 50%+ revenue from online
channels and have own website or app
Brand.com Brand’s own website, serving as a digital storefront, to sell
directly to customers

COD Cash-on-delivery

Logistics Aggregator Consolidates shipping services from multiple logistics

companies into a single platform or application for customer
access
E-Logistics Using technology to optimize traditional logistics for efficient
procurement, warehousing, inventory management, demand
forecasting, distribution, and other activities
Service Level An SLA is a contract between a service provider and a customer
Agreement (SLA) defining the service to be provided, performance expectations,
measurement criteria, and consequences for non-compliance
Third-party logistics Typically a full-stack logistics service, managing various aspects
(3PL) of procurement and fulfilment activities for brands

Quick commerce Vertical e-commerce where emphasis is on quick deliveries,

typically in less than an hour

NCCS New Consumer Classification System is a tool that is used to

classify households in India based on their socioeconomic status

High-income Combined annual income greater than INR 1.1 Mn or USD 13,250.
Households

Upper Middle-class Combined annual household income between INR 0.8 to 1.1 Mn or
Households USD 9,600 to 13,250

Lower middle-class Combined annual household income between INR 0.3-0.8 Mn or

Households USD 3,600-9,600

Low-income Combined annual household income lesser than INR 0.3 Mn or

Households USD 3,600

27
Research Methodology

Our research methodology involved a three-pronged approach to understand the direct-to-

consumer (D2C) brand ecosystem comprehensively. First, we engaged with Private Equity
(PE/VC) firms that manage diverse portfolios of digital-first D2C brands. These discussions
covered trends, growth strategies, and logistics needs within the evolving brand landscape.
Second, we interviewed CEOs and founders of D2C brands to gain insights into their brand
positioning, operational support ecosystem, and specific logistics requirements. Lastly, we
interacted with third-party logistics providers serving both incumbent and insurgent D2C
brands. These engagements provided a holistic view of the intricate logistics framework
supporting the D2C ecosystem.

For our 3PL ratings matrix, we evaluated the 3PL providers based on two primary criteria
aligned with D2C brand requirements: Experience & Features, and Operational Performance.
Various metrics were considered for each criterion. Under Experience & Features, we
assessed account management, technological capabilities, shipment protection, returns
management, and full-stack offerings. For Operational Performance, we examined time
reliability, pricing and payment terms, and reach and availability.

28
Disclaimer

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intended solely for information purposes and general guidance on matters of interest for
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About the Authors

Kanishka Mohan,
Partner at Redseer

Kanishka brings over 11 years of experience in research-backed

consulting and entrepreneurship. He specializes in advising
internet startups and investment firms, having delivered over 200
projects in the last decade. He holds an MBA from IIM Calcutta
and a B. Tech from IIT Roorkee.

He's reachable at [email protected]

Shivreet Majithia
Senior Consultant at Redseer

Shivreet has over 5 years of experience in serving clients across

BPC, consumer tech, healthcare, and education on multiple
projects spanning growth and go-to-market strategies and
through leadership reports. She holds an MBA degree from ISB
Hyderabad and a B. Tech from Symbiosis International.

She’s reachable at [email protected]

Chinmayi Lanka
Associate Consultant at Redseer

Chinmayi has worked on growth strategy projects and market

narrative reports primarily across mobility, FMCG, and insurance.
She also has exposure to cost optimization and operations
management. She holds an MBA degree from XLRI Jamshedpur,
and a B. Tech from NIT Trichy.

She’s reachable at [email protected]

Acknowledgements
The authors extend their gratitude to all who contributed to this report; in particular to
Tanishka Maheshwari (Associate Consultant Intern) and other Redseer colleagues for their
support while developing this report.

The authors also extend sincere gratitude to the esteemed professionals whose insights
and industry experience greatly enriched this report.

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