In today's deep-dive, we will look at why India's D2C brands, which once promised to make physical retail unnecessary, are now rushing to open stores. We will examine why some brands like Lenskart and BlueStone are making this transition work, while others like SUGAR Cosmetics have been forced to pull back. And whether D2C was ever a new way of doing retail, or simply a faster way to launch a traditional consumer brand.

For much of the last decade, Indian consumer startups were sold a simple idea. You didn't need thousands of stores, a large distributor network or decades of relationships with retailers to build a national brand. A good product, an attractive website and some clever Instagram advertising could get you started. The internet would take care of distribution, customers would discover you on their phones, and the money saved by removing middlemen could go into better products and marketing.

That idea helped create companies such as Mamaearth, SUGAR Cosmetics, Lenskart, Wakefit, BlueStone and dozens of smaller brands. Investors loved the promise because these businesses appeared capable of growing much faster than traditional consumer companies without building expensive physical infrastructure. Some founders even presented conventional retail as an outdated system they would eventually replace.

A decade later, the picture looks very different. According to property consultancy CBRE, digital-first brands accounted for roughly 28% of India's organised retail leasing activity in the first half of 2026. Of the 3.9 million sq. ft. leased by retailers during those six months, approximately 1.1 million sq. ft. was taken up by D2C brands. Fashion and apparel companies accounted for almost 69% of that D2C leasing.

These numbers measure new retail space leased, not the share of consumer spending captured by D2C brands. Nevertheless, they reveal how far the industry's thinking has changed. Companies that once celebrated their ability to sell without stores are now signing leases in shopping malls and high streets. Some are opening hundreds of outlets, while others are closing them because the expansion became too expensive.

What makes this particularly interesting is that both groups were following essentially the same strategy. They started online, built recognition and eventually moved into physical retail. Yet their financial results could hardly be more different.

To understand why, we need to revisit what made D2C attractive in the first place.

Before ecommerce became mainstream, launching a consumer brand in India was difficult and expensive. A new shampoo, lipstick or clothing label had to convince distributors to stock its products, persuade shopkeepers to give it shelf space, offer margins and discounts, and spend heavily on advertising before enough people recognised the name.

Established companies such as Hindustan Unilever, Dabur, Marico and ITC had spent decades building those relationships. Their distribution networks were expensive to create, but they were also an enormous advantage. A new entrant could develop a better product and still struggle to get it in front of customers.

Then came affordable smartphones, cheap mobile data, Amazon, Flipkart and social media. Suddenly, a brand could speak directly to customers without asking a supermarket or distributor for permission.

A founder could launch a skincare product, demonstrate it through Instagram videos, spend money on advertising and start collecting orders. If customers liked it, the company could introduce more products and reach other cities. Product feedback came quickly, and the brand could build a relationship with its early buyers.

This was a genuine improvement over the old system. It lowered the cost of testing an idea and made it possible for relatively small businesses to find customers nationally.

But something important was often overlooked. Selling directly to consumers was not necessarily the same as owning the relationship with those consumers.

A brand advertising on Instagram depended on Meta to find new customers. A brand selling through Amazon or Flipkart depended on those marketplaces for visibility. Even customers ordering from a company's own website might have arrived through paid advertising on Google or Instagram.

The old distributors had been replaced by a different set of intermediaries. These new intermediaries did not demand shelf space or send salespeople to stores, but they charged for advertising, search visibility, delivery and access to customers.

As more D2C brands entered the same categories, they began competing for the same shoppers. A consumer searching for a face serum or protein supplement could find dozens of alternatives within seconds. Advertising became more competitive, discounts became harder to avoid, and brands had to spend continually to remain visible.

The difficulty was particularly severe for products that customers did not buy frequently. A brand selling a ₹700 cosmetic product might acquire a customer today, but it could be months before that person returned. During that period, the company still had to pay for advertising, employees, warehousing and fulfilment.

Even repeat purchases offered no guarantee of loyalty. Online shoppers could compare competing products almost instantly, while marketplaces regularly promoted discounts and alternatives.

There was also the problem of scale. India's online retail market was estimated at around $75 billion in 2024, representing roughly 7% of the country's total retail spending, according to a Deloitte-FICCI report. Digital commerce was growing rapidly, but the vast majority of Indian retail still happened outside the internet.

For startups that wanted to become national consumer brands, remaining exclusively online meant competing intensely for a relatively small share of the overall market.

That is when the physical store began looking attractive again.

Moving offline offered several advantages that were difficult to reproduce through a website.

A customer could try a pair of glasses, check how a foundation shade looked on her skin, feel the quality of a shirt or lie on a mattress before buying it. Even someone who ultimately ordered online could become more comfortable with a brand after seeing its store in a familiar shopping mall.

Physical presence also improved credibility. An unfamiliar online brand might look like one of hundreds of advertisements appearing on Instagram. A shop in a recognised mall gave customers somewhere to visit, complain, return a product or seek assistance.

Then there was the possibility of acquiring customers without paying an advertising platform for every visit. A store in a busy location could attract shoppers who had never heard of the brand. If enough of them purchased something, the store could become both a sales outlet and a way of introducing the brand to new customers.

The economics appeared attractive in another respect. Selling through a company's own store could allow it to retain margins that would otherwise go to marketplaces or other retailers.

But those savings came with their own costs.

A physical outlet needed a security deposit, interiors, fixtures, employees, electricity, rent and inventory. A store that performed well during festivals could struggle during quieter months. A popular product might sell out in one location while sitting unsold in another.

Unlike digital advertising, a lease could not be switched off whenever sales slowed. And unlike an online advertisement, every new store required management attention.

These were familiar problems for traditional retailers. They were unfamiliar to some startups whose first few hundred crore of sales had come from online channels.

The clearest example of what could go wrong is SUGAR Cosmetics.

SUGAR was among the early Indian beauty brands that demonstrated how effectively the internet could help a new company challenge established names.

It built an identity around bold colours, Indian skin tones and young consumers who were increasingly comfortable discovering cosmetics online. As the business grew, however, competing with Maybelline, Lakmé and other established brands required more than an attractive online presence.

Colour cosmetics remained a category where many consumers wanted to see and test products before purchasing. SUGAR therefore expanded into physical retail, setting up exclusive stores and selling through other retail outlets.

The expansion initially looked like evidence that the brand was becoming mainstream. According to a September 2026 Moneycontrol investigation, SUGAR's physical distribution footprint exceeded 2,400 retail locations at its peak, including roughly 200 exclusive brand outlets. The remaining locations were largely other retail channels, not necessarily company-owned stores.

The financial picture, however, was deteriorating. SUGAR's operating revenue declined from ₹505 crore in FY24 to ₹404 crore in FY25, while its net loss nearly doubled from ₹68 crore to ₹135 crore.

Part of the problem was inventory. A cosmetics company cannot simply stock a handful of products everywhere. Foundations require different shades, lipsticks come in numerous colours, and retailers expect popular products to remain available.

SUGAR's catalogue had expanded to around 850 products and variations. Supplying the right inventory to a large network was becoming increasingly difficult. A warehouse fire in November 2024 further disrupted an already strained operation.

At one point, according to the report, SUGAR was fulfilling only around 60% of orders placed by its retail partners, well below the 85-90% industry benchmark cited by sources. Demand that should have translated into revenue was being lost because the company could not supply the required products.

The problem was made worse by the size of its network. Retailers continued to expect stock, employees had to be paid, and the physical presence that once helped expansion made recovery considerably more complicated.

SUGAR is now attempting a substantial retreat. Its reported plans involve reducing its overall retail presence to around 1,000-1,100 locations and potentially cutting exclusive brand outlets to 35-65, depending on performance. These are proposed targets, not completed closures.

It is also concentrating inventory on roughly 250 priority products instead of trying to supply everything everywhere.

The financial consequences go beyond revenue and losses. SUGAR was valued at approximately ₹3,750 crore during its earlier funding years. In September 2026, it was reportedly discussing a ₹250 crore capital infusion at a valuation of around ₹550-600 crore. Those funding terms were reported discussions rather than a confirmed completed transaction, but the proposed valuation represents a dramatic reduction.

SUGAR's experience does not mean physical retail was a mistake. Beauty remains a category in which stores have considerable value. The mistake appears to have been expanding distribution faster than the company could reliably supply products and generate enough sales from individual locations.

A brand can have thousands of outlets and still lose customers if the products they want are unavailable.

SUGAR's reversal becomes more revealing when compared with another digitally born beauty company that encountered a different version of the same problem.

Mamaearth's early growth was closely associated with the rise of online-first consumer brands in India. It understood digital marketing, worked with influencers and built recognition among young parents and beauty consumers.

By FY24, Mamaearth itself had grown to roughly ₹1,000 crore in annual revenue, while parent company Honasa Consumer had become a listed business operating several beauty brands.

But online success did not automatically translate into effective traditional distribution.

As Mamaearth expanded into neighbourhood shops, supermarkets and other physical outlets, Honasa initially depended heavily on a distribution structure involving super-stockists and distributors. Products passed through multiple hands before reaching retailers.

This created difficulties with inventory visibility and control. Goods could be sitting with distributors without necessarily reaching customers. Products that had moved from Honasa's warehouses into the distribution network were not always moving through shops at the same speed.

In FY25, Honasa launched Project Neev to restructure distribution across its top 50 cities. It removed the super-stockist layer in those markets and shifted towards more direct relationships with distributors.

The financial impact was visible. The transition resulted in approximately ₹63.5 crore of sales returns being recognised in FY25. Honasa's consolidated revenue grew only 7.7% to ₹2,067 crore, while profit fell to ₹73 crore from ₹111 crore in FY24.

Advertising expenses were also considerable, reaching approximately 36% of revenue in FY25.

This is a particularly useful reminder of what the D2C model did and did not solve. Honasa had become highly capable at creating consumer awareness online, but it still needed the mundane capabilities that large FMCG companies had developed over decades: predicting demand, managing distributors, keeping shops supplied and monitoring whether products were actually selling.

The company has since improved its performance. FY26 consolidated revenue reached ₹2,392 crore, while net profit recovered to approximately ₹200 crore. Its investor presentation in June 2026 showed direct distribution reaching roughly 1.2 lakh retail outlets, compared with around 20,000 under its earlier model.

Honasa's experience should not be confused with SUGAR's store-cutting exercise. This was mainly a restructuring of third-party distribution rather than a closure of owned shops. Both stories, however, point towards the same difficulty: building a consumer brand requires a functioning supply and distribution system, not merely advertising that persuades customers to buy.

Not every startup managed to recover from expanding too quickly.

The Ayurveda Co., better known as TAC, presents a more extreme example.

Founded in 2021, the business sold Ayurvedic beauty, skincare and wellness products. It raised around ₹125 crore and expanded beyond ecommerce into physical retail.

According to founder Param Bhargava's account, the company had built 20 owned stores, more than 800 beauty-advisor counters and relationships with approximately 110 distributors.

For a relatively young business, that was a substantial distribution network.

But its FY24 financial statements painted a difficult picture. Revenue was ₹59.6 crore, while the company reported a net loss of approximately ₹68 crore. Expenses had climbed to around ₹109.5 crore.

Revenue was growing, but the company was spending heavily to support that growth.

In September 2026, Bhargava publicly confirmed that TAC and its sister brand Khadi Essentials had ceased operations in July 2025 and were being wound down. He attributed the failure partly to expanding across too many channels and hiring senior executives before the business was ready.

TAC had other problems, including the difficulty of raising additional capital and competing in a crowded beauty market. It would be simplistic to blame everything on physical stores.

Yet the case illustrates the danger of treating distribution expansion as proof that a brand has established sustainable demand. A retailer stocking a product, a distributor placing an order and a consumer repeatedly purchasing that product are three very different things.

When funding is readily available, companies can spend ahead of demand while building their networks. When fresh capital becomes difficult to raise, that approach leaves very little room for mistakes.

The uncomfortable comparison is that, during the same period, some other digital-first companies were expanding physical stores while improving their profitability.

Lenskart shows why the difference matters.

Lenskart also began with the idea that traditional retail could be improved through technology and a more efficient supply system.

Eyewear had historically been a fragmented business, with local opticians controlling much of the customer relationship. Lenskart offered online discovery, a broad catalogue, competitive pricing and increasingly centralised manufacturing.

But it did not remain committed to the idea that consumers should purchase spectacles without visiting a shop.

Instead, it built stores around services that customers actually needed. People could get their eyes tested, try frames, check fitting and obtain assistance with prescription lenses.

The store became part of the product experience rather than merely another location carrying inventory.

Lenskart's financial performance suggests that the approach is working. In FY26, the company reported consolidated revenue of ₹8,814 crore and net profit of approximately ₹501 crore. These are group-wide figures covering India and international operations.

In India, it added 542 net stores during the year, taking its domestic network to 2,609 outlets. Globally, its store count reached 3,327.

The most revealing number, however, is not the store count. Lenskart reported 20.8% same-store sales growth in India during FY26, meaning that stores comparable across the two periods were selling substantially more than before.

That matters because a company can report strong revenue growth simply by opening new shops. Growing sales at existing locations suggests that the underlying demand is also improving.

Lenskart's smaller-city stores are particularly interesting. Management reported that new outlets in Tier-2 and smaller markets were achieving payback periods of less than 12 months. This is a company-reported measure rather than independently disclosed cash flows for every store, but it provides a useful indication of how management evaluates expansion.

Lenskart also benefits from a different inventory arrangement. Its stores can display frames, conduct eye tests and collect orders while relying on centralised manufacturing and fulfilment. They do not need to stock every combination of lens prescription and frame.

This makes a Lenskart outlet fundamentally different from a cosmetics shop that needs a wide range of colours, shades and products available immediately.

Scale has also helped its cost structure. In India, rent represented about 6% of revenue in FY26, according to management's adjusted presentation, while marketing costs were around 5.7%. These figures are not directly comparable with another brand's advertising expenses because the businesses and accounting treatments differ, but they illustrate how a productive store network can spread its fixed costs across higher sales.

Lenskart has made physical retail an important part of its business, but the stores solve a customer problem that the website alone cannot fully address.

That distinction becomes even more important in categories where customers spend much larger amounts.

Jewellery presents an unusual challenge for an online-first brand.

Consumers may happily browse designs on their phones, but purchasing a gold necklace or diamond ring involves concerns about quality, authenticity, fitting, exchange and trust. Many buyers also prefer to see jewellery before committing substantial money.

BlueStone recognised this and developed a network of physical stores alongside its digital business.

By March 2026, it operated 340 stores across 134 Indian cities. Its consolidated FY26 revenue reached approximately ₹2,436 crore, up from ₹1,770 crore a year earlier. It also reported a modest net profit of around ₹13 crore, compared with a loss of roughly ₹222 crore in FY25.

This is meaningful progress for a business that had spent years investing in growth.

But BlueStone also demonstrates why successful physical expansion can consume enormous amounts of capital.

Its inventory stood at approximately ₹2,672 crore at the end of FY26, exceeding an entire year's revenue. Spread across 340 stores, that represents nearly ₹7.9 crore of inventory per outlet, although some stock is held centrally rather than physically inside individual stores.

The company's overall inventory turnover was approximately 1.1 times, down from 1.3 times the previous year. In simple terms, a considerable amount of money remained tied up in jewellery while the business waited for it to sell.

Older stores performed better, with management indicating inventory turnover of roughly 1.7–1.9 times in mature outlets. This suggests that the younger store network is still developing, but also highlights the amount of capital expansion requires.

Gold and diamond inventory is very different from a software company's costs. The stock has real resale value, and changes in gold prices also affect financial performance. Nevertheless, money tied up in inventory cannot be used freely for opening additional stores, marketing or reducing debt.

BlueStone therefore presents investors with a different question from the one facing SUGAR.

The concern is not necessarily whether consumers want the product. Sales are growing, profitability has improved and the brand has established a physical presence. The question is how much additional capital the company must commit to keep expanding.

This is why store-level profitability and overall company profitability can tell different stories. An individual jewellery store may make money while the wider company continues investing heavily in inventory and new locations.

The longer-term comparison is CaratLane, another business that began online and eventually became part of Titan.

CaratLane generated ₹4,702 crore in FY26 total income and ₹466 crore in operating profit before interest and tax, a margin of approximately 9.9%. After becoming part of an established jewellery company, it benefited from the advantages associated with a larger retail operation.

The difference between CaratLane and BlueStone is not simply that one sells online and the other offline. Both use physical stores. Their ownership structures, maturity, inventory requirements and financial returns are now very different.

That is what makes comparisons among D2C companies more useful than treating them as one industry.

Fashion is one of the categories driving India's current retail expansion. It accounted for nearly seven out of every ten square feet leased by D2C brands in the first half of 2026.

There are good reasons for this. Customers want to check fit, fabric and quality. Sizes are inconsistent across brands, and online clothing orders can involve costly returns and exchanges.

For fashion brands, stores can remove some of that uncertainty. They also allow companies to capture shoppers who are browsing without having decided what to buy.

Snitch offers a useful example of the opportunity and its limitations.

The Bengaluru-based menswear brand reported approximately ₹900 crore in FY26 revenue, an 80% increase from ₹498 crore in FY25. According to founder Siddharth Dungarwal, offline channels accounted for roughly 40% of sales, with online contributing the remaining 60%.

Those FY26 figures were management-reported and unaudited when disclosed in April 2026, but they show how important physical retail has become to a company that built much of its early popularity online.

Profitability is a different matter. The founder indicated an EBITDA margin of around 2-3%, equivalent to roughly ₹18-27 crore on ₹900 crore of sales, before depreciation, interest and taxes.

Earlier financial statements also showed the cost of expansion. Snitch's rent expenses increased from around ₹1.6 crore in FY24 to ₹24 crore in FY25. Marketing expenses rose from approximately ₹35 crore to ₹82.6 crore over the same period.

The company was growing rapidly, but the costs of advertising, running stores and supporting a larger organisation were also rising.

A similar tension is visible in GIVA, the digital-first jewellery brand. Its FY25 revenue almost doubled to ₹518 crore, while its net loss increased to ₹72.3 crore. Roughly half its sales came from offline channels.

Neither company should automatically be labelled an unsuccessful retailer. Snitch has achieved significant scale, while GIVA is still building its network. Their results simply show that expanding into stores does not immediately translate into large profits.

For an investor, ₹900 crore of revenue at a 2–3% operating margin is a very different proposition from ₹900 crore of revenue at a 15% margin.

Consumer recognition gets people through the door. It does not guarantee that enough money remains after paying for the clothes, advertising, rent, staff and everything else.

Another useful example comes from Wakefit, which started by selling mattresses directly to consumers.

A mattress can be researched online, but comfort remains personal. Customers may want to lie down, compare firmness and examine the product before deciding. Physical stores give Wakefit a way to address that uncertainty.

Its company-operated network expanded from 105 stores in FY25 to 139 in FY26. Revenue reached approximately ₹1,489 crore, up 17%, while reported net profit was around ₹189 crore, compared with a ₹35 crore loss the previous year.

There is an important qualification here. FY26 profit included a roughly ₹98 crore deferred-tax credit, which boosted the reported bottom line. The business still improved operationally, but the headline profit should not be taken entirely as recurring earnings from selling mattresses and furniture.

Wakefit's case nevertheless supports an important point: stores make more sense when they improve the buying experience sufficiently to justify their costs.

Lenskart's eye tests, Wakefit's mattress trials and BlueStone's jewellery consultations give customers reasons to visit beyond seeing products already available on their phones.

Contrast that with a store selling a familiar facewash or shampoo. If the customer knows the product, trusts the brand and can get it delivered conveniently, a dedicated shop may offer little additional value.

That does not mean such brands should avoid offline retail. It may simply make more economic sense for them to sell through existing chemists, supermarkets or beauty chains instead of operating expensive standalone stores.

Nykaa illustrates another variation. Although it is primarily a beauty and fashion retailer rather than a pure D2C brand, its journey helps explain why digital discovery and physical retail can coexist.

The company reported FY26 revenue of ₹10,022 crore and profit of ₹204 crore. Its stores allow shoppers to examine products and speak with beauty advisers, while the online business offers greater convenience and selection.

The wider lesson is that a physical outlet must earn its place in the business. It cannot survive indefinitely merely because management believes every serious consumer brand needs hundreds of stores.

For years, much of the D2C investment argument rested on the savings from eliminating middlemen.

Suppose a traditional consumer brand sells through distributors and retailers. Both take a share of the final selling price. A D2C company selling through its own website can theoretically keep that money.

But the customer still has to arrive at the website.

Advertising costs money, as do payment processing, packaging, shipping, returns, customer support and maintaining a technology platform. When products are sold through marketplaces, additional commissions and other platform charges enter the calculation.

The apparent margin advantage begins to narrow.

Offline retail changes the mix of expenses rather than eliminating them. A shop may generate walk-in sales without paying for every customer click, but rent and salaries continue whether ten people enter the shop or a hundred.

This makes sales per store, repeat purchases and the time required to recover the initial investment critical measures.

The type of store also matters. A fully owned flagship in a premium mall is financially different from a small franchise outlet or a branded counter inside a department store.

In the franchise model, another party may fund much of the property and operating expense, but the brand generally shares economics with that partner and has less direct control. Counters inside existing retailers may require less investment while offering lower margins or reduced visibility.

A company reporting 1,000 retail touchpoints could therefore have a very different business from one operating 1,000 company-owned stores. Comparing the two solely by store count can be highly misleading.

There is another complication in online economics. Consumers increasingly expect rapid delivery, especially in beauty, food, personal care and everyday products. Quick-commerce platforms such as Blinkit, Zepto and Swiggy Instamart have created an additional distribution channel for consumer brands.

This creates fresh opportunities but also another intermediary with its own commercial terms, product-placement requirements and operating costs.

For products that customers replenish regularly, quick commerce may sometimes be a more sensible route than asking shoppers to visit a dedicated brand store. But brands must still manage margins, availability and the risk of depending on platforms they do not control.

The broader pattern is becoming familiar. Whenever a new channel grows quickly, consumer companies rush towards it. Eventually, competition increases, distribution becomes more expensive, and the businesses with healthier product margins and repeat demand are better positioned to absorb those costs.

D2C brands have already experienced that process with online advertising. Physical retail is forcing many of them to confront it again.

The contrast between SUGAR and Lenskart suggests that the next phase of D2C retail expansion will be less about how many stores a brand can open and more about how those stores perform.

Lenskart is expanding because its existing stores are generating stronger sales and management sees demand in smaller towns. SUGAR is reducing its footprint because its earlier expansion made inventory and operational problems difficult to manage.

Both decisions can be sensible. A company closing unproductive stores may be making better progress than one opening dozens of outlets that have not yet demonstrated a path to profitability.

CBRE's latest report also points towards smaller retail formats, shared spaces and stores designed for product trials rather than carrying large inventories.

For some consumer brands, a few flagship stores in important cities may be sufficient to establish credibility. Others may be better served through franchise partners or counters inside existing shops. High-frequency products may need extensive distributor relationships, while expensive products requiring consultation may justify company-owned stores.

The correct answer will depend on what customers are buying, how often they purchase it, how much assistance they need and how much capital the brand must commit.

This also has implications for startup valuations.

During the earlier D2C funding boom, investors often focused on revenue growth, customer acquisition and the possibility of building the next large consumer brand. Losses were tolerated because distribution was expected to become more efficient as the company grew.

The financial results of today's companies suggest that the distinction between a promising product and a profitable retail business deserves much greater attention.

Lenskart's improving existing-store sales, Honasa's distribution restructuring, BlueStone's inventory requirements and Snitch's thin margins all reveal different parts of the same problem. Revenue growth alone cannot explain whether the business is becoming stronger.

Investors need to understand how much capital is required to generate that revenue, how long stores take to recover their investment, what proportion of purchases comes from returning customers and whether growth continues when discounts and advertising are reduced.

There is also an important question about competition. Traditional consumer companies have not stopped evolving while D2C brands expanded.

Established FMCG businesses have improved their online presence, launched products for younger consumers and entered new categories. Large retail chains have developed private labels, while ecommerce platforms and quick-commerce companies increasingly influence which brands customers discover.

Digital-first startups no longer enjoy the novelty they once did. They are competing against companies with established distribution, purchasing power and retail experience, along with hundreds of younger brands using similar marketing channels.

The market is still large enough to accommodate new winners. But merely being born online offers far less differentiation than it did ten years ago.

The answer depends on which part of the business we are talking about.

D2C genuinely changed how brands could begin. Founders no longer needed a national distribution network to test products, understand customers or establish a following. They could start small, learn quickly and reach consumers across India without first building a physical retail organisation.

That change helped create a generation of consumer companies that might have struggled to emerge under the traditional model.

What D2C did not change was the difficulty of building a consumer business that could last.

Products still need to reach customers reliably. Quality has to remain consistent. Inventory has to be managed. Buyers have to return without constant discounts, and the business must eventually earn more from sales than it spends acquiring and serving customers.

As brands grow, those requirements become more demanding rather than less.

Lenskart, CaratLane and Wakefit have shown that physical retail can strengthen a business that began online. SUGAR and TAC have demonstrated how expansion can become a serious liability when the organisation cannot support it. Honasa's recovery suggests that distribution mistakes are not necessarily permanent, but correcting them can be expensive.

India's digital-first brands are not abandoning the internet. They are discovering that different customers, products and buying occasions require different ways of selling.

Perhaps the most useful way to understand D2C, then, is not as a permanent alternative to traditional retail but as a cheaper and faster way of creating a brand.

The internet made it possible to reach the first thousand customers without opening a shop. It could even help reach the first million. But building a business that serves tens of millions of people profitably still requires many of the capabilities that older consumer companies spent decades developing.

The brands that understand this will continue to grow online and offline. Others may discover that opening a store is considerably easier than making it profitable.

For all the changes brought by ecommerce, the final test of a consumer business remains remarkably familiar: customers must keep coming back, and their purchases must eventually pay for the cost of serving them.