FMCG marketing has traditionally been built around a simple equation—put the brand in enough homes, enough stores and enough minds, and growth would follow. The machinery constituted of mass media for awareness, distribution for availability and promotions for conversion.
But something fundamental is changing. The consumer is no longer moving through the neat, linear journey that the traditional FMCG playbook was designed around.
Today, a consumer can discover a product on social media, search for reviews, compare prices, see it recommended by an algorithm, buy it on a quick-commerce app and potentially reorder it weeks later.
For established brands, this is creating opportunities to extend the traditional FMCG model, bringing the consumer closeness, speed of experimentation and data-led decision-making of D2C into a business that already has the advantage of scale, distribution and established brand equity. A 2025 Crisil Ratings study found that roughly two-thirds of FMCG acquisitions over the past five fiscals were in the D2C space. It also found that around 85 per cent of these acquisitions were aimed at entering niche and premium segments, suggesting that D2C is increasingly becoming a route for established FMCG companies to broaden their portfolios and respond to emerging consumer needs.
This shift is visible across FMCG companies. Emami acquired a 60 per cent stake in IncNut Digital, which owns D2C beauty brands Vedix and SkinKraft, while Wipro Consumer Care acquired a 60 per cent stake in digital-first skincare brand Dermatouch. Marico, HUL and ITC are among other FMCG companies that have expanded their portfolios through acquisitions of digital-first brands.
But acquisitions are only one way to build the D2C muscle. Colgate-Palmolive India chose another—handing Palmolive’s D2C and e-commerce operations to Bombay Shaving Company, with its leadership acknowledging that the D2C flywheel operates differently from the traditional FMCG model.
Vikas Chawla, Co-founder, Social Beat, comments, “A large FMCG company admitted that it cannot build the D2C muscle inside its existing structure at the speed the market moves. Renting the capability is faster than hiring. The catch, however, is that you can rent the flywheel, but not the learning. It will take a few quarters to see whether the move has worked for Colgate-Palmolive.”
The question, then, is no longer whether FMCG needs D2C. It is what FMCG is trying to learn from the brands built around it, and what D2C, in turn, can learn from the companies that built India’s consumer economy.
Where the differentiation lies
The D2C-FMCG divide is often reduced to channels—one sells through websites and marketplaces, the other through supermarkets, kiranas and other physical outlets. But the more fundamental difference lies beneath the channel strategy, in the speed at which a business can make decisions.
Devang Shah, Chief Business Officer, Consumer Markets, dentsu India, elaborates, “Traditional FMCG marketing runs on quarterly or annual planning cycles, is built around mass reach and GRPs, typically doesn’t own the end consumer data, and retailers and platforms sit in between. D2C marketing runs on much shorter loops—first-party data feeds decisions weekly or daily, creative and pricing get tested live, and success is measured on CAC-to-LTV economics rather than reach and frequency.”
That difference creates a fundamentally different marketing rhythm. A D2C brand can launch a product, see how consumers respond, change the creative, adjust pricing or assortment and feed those learnings back into the business within a relatively short cycle. An FMCG marketer may be working with a much larger investment, longer planning horizon and multiple layers of approval.
The people and organisational structures are different too. “FMCG marketers are typically trained as brand-builders, comfortable with big-bet campaigns, agency partnerships and multi-year equity-building, but that training doesn’t automatically transfer to running always-on performance marketing, reading a funnel, or shipping an imperfect ad and iterating on it live,” Shah states.
For Chawla, the biggest gap is the speed of experimentation and the unit of measurement. “FMCG plans annually, buys media in campaign bursts, and reads performance at brand level. D2C decides weekly and reads contribution margin per SKU per platform. Most FMCG teams copy the D2C tactics—performance ads, quick commerce listings—without copying the organisational design that makes them work, i.e. one person owning an SKU’s P&L end-to-end.”
Essentially, D2C is no longer simply a side project that marketers can bolt onto the traditional organisation. It increasingly demands its own operating logic.
Where D2C wins
The most obvious advantage of D2C is proximity. A D2C-first brand does not have to wait for a retailer, distributor or periodic market study to tell it what consumers think. Its own website, app and digital storefront can become a live feedback mechanism.
For Veera Raghavan, Chief Marketing Officer, Sweet Karam Coffee, that is one of the biggest advantages of the model. “For us, the biggest advantage of being D2C-first has been the ability to build a direct understanding of the consumer and create a strong test-and-learn environment before scaling. Our own website and app have allowed us to launch products, observe what resonates, understand buying behaviour and use those learnings to make sharper decisions as we expand into other channels.”
D2C also gives brands greater freedom to experiment with assortment and formats without the physical shelf constraints of traditional retail. Those learnings can subsequently inform how products are introduced on quick commerce and other channels.
The advantage, however, is not limited to data. “Being D2C has helped us build a direct relationship with our consumers and an emotional connection with the brand. That becomes increasingly important as we scale, because while products, packaging and formats can be replicated, the relationship people have built with the brand is much harder to replicate.”
Chaitanya Ramalingegowda, Director & Co-founder, Wakefit.co echoes this. “Being D2C-first has helped us stay close to the consumer. We hear from them directly, so we know quickly what is working, what is not and where the gaps are. That feedback shapes our product as much as our marketing.”
Instead of treating marketing as a series of campaigns, D2C creates the possibility of building a feedback loop between consumer, product and marketing.
What FMCG gets right
The learning, however, is not one-way. The other half of the story is that D2C brands are increasingly discovering that there are things large FMCG companies have spent decades learning, and that cannot be replicated simply by hiring a performance marketer or putting a product on quick commerce.
For Ramalingegowda, the biggest lesson is institutional learning. “If I had to pick one thing D2C brands should learn from large, established players, it is the historic learning that they have accumulated over the years. These companies have been through cycles we haven’t seen yet. They know what worked and what didn’t, and why. You can’t really shortcut that kind of history. It is part of why we have brought in independent board members who have worked at and scaled large businesses.”
That experience becomes particularly valuable as a young brand moves from finding product-market fit to building a business that can withstand changing consumer behaviour, economic cycles and competitive pressure.
The second lesson is systems. “Another thing larger companies and MNCs have figured out well is how to build systems that hold up as you scale, so that what works at 10x still works at 100x without losing the plot on why it worked in the first place. That is a problem we are actively solving for right now,” Ramalingegowda reveals.
It is a different kind of capability from the speed and flexibility that D2C brings. But as a brand gets larger, the ability to replicate quality, supply, service and brand experience becomes just as important as the ability to react quickly. For Raghavan, that lesson is particularly relevant to distribution. “Sustainable growth needs to be built on distribution, operational capability and consistency, not just marketing. For a brand like Sweet Karam Coffee, scaling means being able to deliver regional products consistently, batch after batch, across markets while maintaining the experience consumers expect from us.”
The company is consequently building its offline presence. A year ago, offline accounted for effectively zero per cent of its marketing investment; today, around 15 per cent goes into areas such as events, activations and shop-in-shops—an effort Raghavan describes as building the distribution muscle that traditional FMCG companies have developed over decades.
This is where the apparent contradiction between the two models becomes interesting.
D2C businesses can often understand consumers faster; FMCG businesses can often reach them more efficiently at scale. D2C can experiment with assortment without worrying about shelf space; FMCG has decades of experience ensuring the right product is available in the right market, at the right price, consistently.
Neither capability cancels out the other.
The winning formula
The emerging model, therefore, may not be about FMCG becoming D2C or D2C becoming FMCG. It could be about each borrowing the capabilities it does not naturally possess.
For FMCG, that means creating shorter decision-making loops, giving digital businesses greater autonomy, building first-party consumer understanding and becoming comfortable with continuous experimentation. The Colgate-Palmolive–Bombay Shaving Company partnership is one version of this approach—rather than attempting to recreate every D2C capability internally, the company has brought in a specialist while retaining control over product, supply chain and traditional distribution.
Shah points towards four key parameters that will determine the success of the FMCG-D2C integration. “The first determinant is whether a brand treats D2C as a data and learning engine that feeds back into product, pricing and even offline range decisions, versus running it as a siloed sales channel chasing incremental online revenue,” he notes.
“Secondly, there should be real discipline on unit economics, and fixing the CAC-to-LTV equation rather than assuming an FMCG balance sheet can outspend the problem. And thirdly, there should be organisational willingness to let D2C teams operate on different decision speeds and metrics than the core business,” Shah further states. Finally, D2C is still a small share of most FMCG companies’ overall sales, so brands must have the willingness to fund a multi-year build rather than expecting performance marketing alone to make it material to the top line in a couple of quarters.
For D2C, on the other hand, the learning is to build brands that can survive beyond performance marketing, develop distribution and operational systems, understand unit economics and create the organisational muscle required for scale.
The future is unlikely to belong to businesses that blindly copy the other model. It will belong to those that understand which capability is needed at which stage of growth.
