Tier 2, 3 cities drive 66 pc of new D2C orders in FY26

Smaller cities are powering the next phase of growth for India's direct-to-consumer (D2C) brands, with Tier 2 and 3 cities accounting for nearly 66 per cent of new orders in the financial year 2025-26, according to a report by Unicommerce. Reflecting a significant shift in the online shopping landscape, buyers from these markets contributed 60 per cent of the incremental Gross Merchandise Value (GMV) in FY26 compared to the previous fiscal, showing demand expanding well beyond metro cities. Overall, the Indian D2C segment continued its upward trajectory, witnessing a 33 per cent rise in order volumes and a 32 per cent increase in GMV in FY26 over FY25, the e-commerce enablement platform said. India's D2C market, currently estimated at USD 10-12 billion, is projected to touch USD 60 billion by 2030, the report noted. As demand expands geographically, brands are also witnessing improved delivery metrics. Data from Unicommerce's logistics platform Shipway showed that return-to-origin (RTO) rates declined to around 21 per cent by February 2026, down from nearly 39 per cent during the festive period in November 2025. The company attributed this post-festive decline in RTO rates to sustained delivery improvements, stronger order verification, and more efficient execution, which helped offset the usual festive spikes caused by higher volumes, first-time buyers, and reliance on cash-on-delivery (COD). The report also highlighted the growing role of technology in the sector, noting that AI-led recommendations and chat-based interactions are increasingly helping brands create personalised experiences from product discovery to post-purchase engagement. The report's analysis is based on over 400 million order items processed through brand websites via Unicommerce's platform Uniware between April 2024 and February 2026.