Unit Economics

D2C vs Marketplace — True Margin Comparison for Indian Brands

On gross margin, D2C wins by 15–22 points over marketplaces. On CAC-loaded CM2, D2C wins by only 3–8 points — and often loses against high-intent marketplaces like Nykaa. The full picture requires comparing CM2, not gross margin.

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Why D2C gross looks better

No 18–25% marketplace commission. No marketplace shipping mandate. Full control of returns. But you pay for the customer — Meta Ads CAC in beauty is ₹400–₹900, vs marketplace-organic CAC of ₹0–₹150.

Why marketplace CM2 can win

High-intent traffic on Nykaa or Amazon search converts at 4–8% vs D2C's 1–2.5%. The CAC math works when the marketplace's organic intent does the customer-acquisition work for you. Repeat orders, however, structurally favor D2C.

Frequently asked questions

What's a typical Indian D2C site conversion rate?↓

1.5–2.5% for ad-driven traffic. Higher (3–5%) for repeat-customer and email-list traffic.

Is D2C always lower CAC than Amazon?↓

No. Amazon Sponsored Products CAC for high-intent skincare keywords is often ₹150–₹350 — competitive with Meta Ads to a D2C site.

How should I split inventory between D2C and marketplaces?↓

Most successful Indian D2C brands at the ₹10–50 Cr ARR band split roughly 35–55% D2C, 30–45% Amazon, 10–20% Nykaa/Myntra, with marketplaces driving acquisition and D2C driving repeat.

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