Direct-to-consumer (D2C) channels are expanding significantly faster than traditional e-commerce marketplaces in India, according to a new report by McKinsey & Company, signalling a shift in how businesses—particularly small enterprises—reach consumers online.
The report indicates that D2C sales in India, currently valued at around US $ 10–11 billion, are expected to surge to US $ 55–60 billion by 2030. This growth represents a compound annual growth rate (CAGR) of about 38% over the next five years.
Overall, India’s e-commerce sector is projected to expand from roughly US $ 70–80 billion currently to US $ 180–200 billion by the end of the decade, driven largely by the rapid expansion of D2C brands and quick-commerce platforms.
While large marketplaces such as Amazon, Flipkart, Myntra and Meesho will continue to play a foundational role in India’s digital commerce ecosystem, the report notes that growth dynamics are beginning to shift.
D2C channels are expanding at roughly three times the pace of marketplace platforms. Nearly half of the incremental gross merchandise value (GMV) expected by 2030 is likely to come from micro, small and medium enterprises (MSMEs) operating outside traditional marketplaces.
Marketplace sales, currently estimated at about US $ 60 billion, are projected to reach approximately US $ 100 billion by 2030, growing at a comparatively slower CAGR of 10–12%.
According to the report, many MSMEs are increasingly choosing D2C channels because they offer lower distribution costs, better access to first-party customer data, improved margins and greater flexibility in branding and customer engagement.
At the same time, quick commerce is also expected to witness rapid growth, expanding from about US $ 5–6 billion today to US $ 35–40 billion by 2030, with a projected CAGR of 45%.
Neelesh Mundra stated that India’s expanding middle-income population would significantly increase the addressable market for online businesses. He noted that the country could add more than 140 million households earning over US $ 10,000 annually by 2030, creating substantial opportunities for digital commerce.
The report also highlights the growing importance of smaller cities in the evolution of India’s e-commerce ecosystem. Tier-2 and Tier-3 cities already account for more than 60% of e-commerce shipments and are expected to drive future growth as internet penetration improves and household incomes rise.
Despite the rapid expansion, e-commerce penetration in India remains relatively low at around 6–8%, significantly below levels seen in markets such as the United States and China. Analysts say this indicates considerable room for long-term growth in the sector.
