Mint Explainer | Why your favourite online brands are taking over the mall
India’s digitally native brands, those that produce and sell directly to consumers, are stepping beyond screens into malls, high streets, and curated experience centres. In the first half of 2025, direct-to-consumer (D2C brands) accounted for 18% of retail leasing, up from 8% in the same period last year, according to real estate consultant CBRE.
Mint explains the factors shaping the shift.
Why the shift?
Between 2020 and 2022, many digital-first brands grew rapidly as online shopping surged during the pandemic. While e-commerce continues to expand, offline purchases still dominate retail, accounting for more than 75% of transactions in some estimates. To capture these consumers and deepen reach beyond metro cities, brands are going omnichannel.
Rising advertising costs are another driver—physical stores allow brands to tap into organic footfall and natural discovery. In tier 2–4 cities, offline expansion is often cheaper per incremental customer and can be more scalable for certain products.
Who’s leading the offline push?
Fashion and apparel dominate, making up nearly 60% of D2C retail leasing in H1 2025. Sensory-driven categories like homeware (12%), jewellery (12%), and health & personal care (6%) follow, while food & beverages account for 5%, with the remainder spread across consumer electronics, hypermarkets, entertainment, and financial services.
Fashion is a high-touch category where physical trials, texture feel, fit, and instant gratification play a huge role in purchase decisions, something online still struggles to replicate. Additionally, apparel benefits from seasonal footfall (sales, festivals), making physical presence lucrative in high-footfall zones like malls and high streets.
Where is it happening?
Delhi-NCR leads with 26% of D2C retail leasing, followed by Bengaluru at 22% and Hyderabad at 18%. The data shows a strategic shift from mall-only locations to diversified formats.
About 46% of leased space is on high streets, which offer consistent footfall and flexible leasing. Malls account for 40%, providing curated retail ecosystems, while standalone stores, 14% of the total, serve as brand-owned destinations or experience-first flagships.
Emerging formats
D2C brands are experimenting with multiple retail formats to optimize reach and cost. In H1 2025, they leased 594,848 sq. ft, with share of total retail space rising from 8% in H1 2024 to 15% in H2 2024, and 18% this year.
Popular formats include micro-stores (Studio Pepperfry), shop-in-shops (boAt in Croma/Reliance Digital), and curated ecosystems (Broadway Lifestyle stores). This multi-format approach allows brands to tailor experiences across geographies and consumer segments.
Challenges ahead
Offline expansion comes with high costs and operational complexities. Setting up stores requires capital for rentals, fittings, and staffing, while scaling profitably demands consistent foot traffic, cost control, and occupancy management.
These challenges intensify in smaller towns, where purchasing power, real estate quality, and operating costs can limit margins despite the need for sensory engagement.
For India’s D2C brands, the offline frontier offers growth and visibility—but success depends on balancing cost, experience, and strategic location.
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