Small brands skip price wars, bet on premium strategy this festive season

Direct-to-consumer companies focus on personalisation and cultural relevance ahead of the festive season as big brands on large e-commerce platforms slash rates

As Amazon and Flipkart launch their deepest festive discounts yet, India's small direct-to-consumer brands are taking a different approach — betting on personalised experiences, premium positioning, and cultural relevance instead of competing on price with bigger players.

 

The strategy reflects a broader shift in Indian consumer behaviour, where buyers increasingly prioritise quality and brand connection over steep markdowns. D2C companies from beauty to food are focusing on limited-edition products, regional marketing campaigns, and authentic storytelling to capture festive spending. Industry executives estimate festive e-commerce sales could grow 15-20 per cent this season, driven partly by recent policy changes.

 

“In today's environment, D2C brands stand out by building identity and relevance,” said Archana Jahagirdar, founder of Rukam Capital, which invests in consumer brands. “What's interesting is that buyers are increasingly willing to shop directly from D2C brands because they're getting more than just products — be it transparent communication, curated experiences, or festive launches that feel personalised.”

 

Vinay Kothari, founder of GO DESi, said the differentiation of his food startup comes from accessibility and cultural relevance. By being present across both e-commerce and quick commerce platforms, the company ensures consumers can access Indian sweets quickly and conveniently. This festive season its Diwali hampers are designed to cater to both value-conscious and premium gifting consumers, helping it expand beyond its core base.

 

“While customer acquisition costs naturally spike during the festive period due to intensified competition, we view it as an opportunity to onboard new segments—many of whom convert into repeat buyers post-festive,” said Kothari. “With 5.7 per cent share in Blinkit and 18 per cent in Zepto already, we're confident of scaling market share further this season.”

 

Coffee brand Sleepy Owl is focusing on corporate gifting with premium packaging designed to make lasting impressions.

 

“Our gifting solution is designed to elevate corporate relationships during Diwali and other brand moments,” said Arman Sood, co-founder, Sleepy Owl.

 

These companies are retooling inventory, packaging, and last-mile delivery ahead of festive demand. The Indus Valley, which makes toxin-free cookware, has planned its festive season inventory at higher than projected demand, with monthly recalibrations based on real-time forecasts. To minimize stockouts, the company is maintaining a 45-day buffer stock, ensuring nearly 70 per cent regional availability for faster deliveries within 0–2 days.

 

“Additionally, we launched our festive schemes early to secure retail shelf space and guarantee consistent product availability across outlets during the peak season,” said Madhumitha U., founder and chief operating officer, The Indus Valley.

 

Cosmetics startup Mila Beauté is focusing on strong inventory planning for quick commerce channels to capture impulse festive purchases as well.

 

“We are targeting both increasing sales and furthering brand love,” said Saahil Nayar, co-founder and chief executive officer of Mila Beauté. “We foresee that our face care category will have a 2-times growth during the festive season.”

 

The push toward premium positioning comes as purchasing power rises in smaller cities driving D2C growth. Data shows Tier-3 cities powered a 21 per cent year-over-year increase in overall e-commerce order volumes during 2025 summer sales. Tier-3 cities accounted for 38 per cent of total e-commerce order volumes, closely followed by Tier-1 cities, which held 42 per cent of the total during the period.

 

“As non-metro consumers gain more disposable income, they are able to participate actively in online shopping, prompting D2C companies to expand their brand visibility beyond metropolitan hubs and tailor offerings to local preferences,” said Jahagirdar.

 

GO DESi exemplifies this approach with offerings priced starting as low as Rs 5 for DESi POPz, which cater to non-metro consumers. The company also offers regional sweets like Mysore Paak and coconut laddoos in single- serve packets.

 

While some segments show robust growth, others reflect more cautious consumer sentiment. “Though spending capacity has increased, there is intentional spending since we began Antinorm’s operations. I personally believe that the premium marketplace will see growth but not with the same urgency,” said Aparna Saxena, founder and chief executive officer of beauty brand Antinorm.

 

Government policy changes are providing additional tailwinds for the sector. India's recently-announced - though not yet rolled out - rate cuts to the goods and services tax (GST) are expected to boost e-commerce sales by 15–20 per cent in high-value categories such as electronics, according to industry executives, as tax rationalisation encourages consumer spending ahead of festivals.

 

However, the recent US tariff increases — bringing effective rates to 50 per cent on key Indian exports — pose limited direct impact on D2C brands focused on domestic consumption. “While the recent US tariff hike may create headwinds for certain export-driven categories, its direct impact on our portfolio remains limited, given that most of our brands are deeply rooted in India's domestic consumption story,” said Jahagirdar of Rukam Capital.

 

“With 92 per cent of consumers planning to sustain or increase spending and festive order values already up by around 14 per cent, we see premium and high-value products gaining strong momentum, especially across semi-urban and rural markets,” she added.