D2C Glossary

The total cost of acquiring one new paying customer, including all marketing and sales spend. Calculated as total acquisition spend divided by new customers in the same period.

The single most-watched unit in D2C. Brands that can't articulate their CAC by channel cannot manage growth profitably.

The total revenue (or gross profit) expected from a customer over their full relationship with the brand. LTV:CAC ratio, ideally above 3:1, is a core health signal for D2C brands.

High repeat-purchase categories (personal care, food, supplements) can sustain higher CAC; low-repeat categories (furniture, electronics) cannot.

Revenue generated for every rupee spent on advertising. ROAS of 4x means ₹4 in revenue for every ₹1 in ad spend. Different from profit-based metrics, it does not account for COGS or fulfilment.

Commonly used to evaluate Meta and Google campaigns. A blended ROAS below 2.5x on D2C channels usually signals unprofitable acquisition.

Total revenue divided by number of orders in a given period. A key lever for improving D2C unit economics alongside repeat rate and CAC.

Bundling, upsells, and subscription models are the primary AOV levers. A 20% AOV increase on the same CAC base directly improves contribution margin.

A proxy for operating profitability that strips out financing, accounting, and tax differences. Used widely in D2C to compare operational health across brands regardless of capital structure.

Adjusted EBITDA, which further excludes one-time costs, is the metric most D2C brands use when claiming profitability milestones before a fundraise or IPO.

The number of unique users who engage with a platform or app within a 30-day (MAU) or single-day (DAU) window. DAU:MAU ratio is a common proxy for stickiness, higher means users return more often, not just once a month.

Investors increasingly compare MAU across categories. A mobility or content platform with more MAU than a quick-commerce leader signals real distribution potential if it moves into commerce.

Revenue per order minus variable costs directly tied to that order, COGS, payment gateway fees, shipping, and platform commission. Distinct from gross margin, which typically excludes fulfilment and logistics.

The number that actually determines whether growth is sustainable. A brand can have strong revenue growth and still be burning cash if contribution margin is negative per order.

Revenue after deducting returns, discounts, and trade allowances, a cleaner growth metric than gross revenue since it reflects what a brand actually keeps after channel-level deductions.

Listed FMCG and beauty companies report NSV growth specifically because it's harder to inflate with heavy discounting than headline revenue is.

A business model in which brands sell directly to end consumers, bypassing traditional wholesale and retail intermediaries. D2C brands typically own the customer relationship, data, and experience.

D2C margins are structurally higher than wholesale, but CAC is fully borne by the brand. The model works best where repeat purchase behaviour and brand loyalty are high.

Ultra-fast ecommerce delivery, typically 10 to 30 minutes, fulfilled from dark stores or micro-fulfilment centres located close to consumers. Blinkit, Zepto, and Swiggy Instamart are India's leading q-commerce platforms.

Q-commerce is now a primary discovery and impulse channel for D2C FMCG brands. Shelf placement on q-comm platforms increasingly drives brand building, not just sales.

A government-backed open protocol for ecommerce in India, designed to democratise digital commerce by enabling any seller to be discovered by any buyer app on a shared network, similar to how UPI works for payments.

ONDC reduces dependence on dominant marketplace platforms. D2C brands with their own inventory can list once and be discoverable across multiple buyer-facing apps.

The total value of goods sold through a platform or brand over a given period, before deducting returns, discounts, or platform fees. GMV is a volume metric, not a revenue or profitability metric.

Platforms (Nykaa, Meesho, Amazon) report GMV to signal scale. D2C brands use it as a growth proxy, but investors increasingly focus on net revenue and contribution margin instead.

A strategy where a brand sells and engages customers across multiple channels, own website, marketplaces, retail stores, q-commerce, with a consistent experience and shared inventory visibility.

Maturing D2C brands are increasingly omnichannel by necessity. Pure D2C CAC economics eventually require offline and marketplace distribution to sustain growth.

A regulatory classification for online marketplace entities where Indian shareholders hold majority ownership and control, under FDI rules governing the ecommerce/marketplace model. Crossing the 50% domestic-ownership threshold qualifies a company for IOCC status.

IOCC status affects what a marketplace can legally do with inventory ownership and private-label programs, a status change here can shift competitive dynamics for third-party sellers overnight.

The percentage commission a marketplace charges sellers on each transaction, sometimes called platform fee or commission rate. Distinct from payment gateway or logistics fees, which are usually charged separately.

Marketplaces cutting take rate to zero in a category are trading short-term revenue for seller lock-in, a signal worth reading as a competitive move, not a permanent discount.

India's food regulatory body, responsible for setting standards on food safety, labeling, and health claims. Issues notices to companies over misleading or unverified claims on packaging and marketing.

FSSAI enforcement on freshness, purity, and health claims is a live, active risk for D2C food and FMCG brands, not a dormant rule that only applies to large players.

A corporate structure where a single parent company owns and operates multiple distinct consumer brands, each with its own identity, rather than extending one flagship brand across categories.

The transition from single-brand to house-of-brands is the hardest scaling move in D2C, most of the value the new brands add depends on whether they can grow without relying on the founding brand's marketing engine.

India's real-time interbank payment system, managed by NPCI. Enables instant bank-to-bank transfers via mobile apps using a VPA (Virtual Payment Address). Processes over 22 Bn transactions per month.

UPI is the dominant D2C checkout payment method alongside COD. Every percentage point improvement in UPI success rate at checkout directly recovers lost revenue.

The fee charged by a payment gateway or acquiring bank to a merchant for processing a digital transaction. Expressed as a percentage of transaction value and varies by payment method (card, UPI, net banking) and merchant volume.

UPI P2M MDR is currently zero by government mandate, but MDR on cards and EMI products can be 1.5-3%. A D2C brand's payment method mix directly affects net margin.

A short-term credit product that lets consumers make a purchase immediately and pay in instalments, often zero-cost for the consumer. The merchant typically pays a higher MDR to offer BNPL at checkout.

BNPL can increase AOV by 20-40% on higher-ticket D2C categories. The cost-benefit calculation for merchants depends on AOV uplift versus incremental MDR paid.

A payment method where customers pay in cash when the order is delivered. Still accounts for roughly 45% of D2C and ecommerce orders in India, particularly in Tier 2 and Tier 3 markets.

COD raises return rates and delays working capital by 3-7 days. D2C brands actively work to shift customers to prepaid through discounts, nudges, and easier digital checkout.

Technology infrastructure that connects a merchant's checkout to banks, card networks, and the UPI system to process and settle digital payments. Examples: Razorpay, PayU, Cashfree, Paytm PG.

Gateway selection affects success rate, settlement speed, MDR, and checkout experience. D2C brands should audit gateway performance, particularly UPI success rates, monthly.

The annualised value of a brand's revenue run rate, calculated by multiplying the most recent month's revenue by 12. Used loosely in D2C to describe scale, though technically a SaaS metric.

When D2C brands claim “₹200 Cr ARR,” verify whether it's actual trailing twelve-month revenue or an annualised monthly figure, the difference can be material in early-growth phases.

The initial document filed by a company with SEBI before a public listing (IPO). Contains financial history, risk factors, business description, and intended use of proceeds. Made public for investor review.

D2C Brief tracks DRHP filings as a leading signal of brand health, the prospectus discloses unit economics, customer concentration, and platform dependency data that brands rarely share otherwise.

Institutional equity funding rounds at successive stages of growth. Series A typically funds product-market fit validation (₹10-50 Cr range in Indian D2C); Series B funds scaling; Series C funds expansion or pre-IPO positioning.

Round labels matter less than the underlying metrics that support them. A Series B investor expects meaningfully different unit economics than a Series A investor.

A business funded entirely from founder capital and operating revenues, without external equity investment. Bootstrapped D2C brands retain full ownership and are under no external pressure to grow beyond profitable unit economics.

Bootstrapped brands are increasingly attractive to PE firms, which can take majority stakes at later stages.

Investment firms that acquire significant or majority stakes in established companies, typically using a combination of equity and debt. PE is distinct from VC, it targets companies with proven unit economics and prefers control or co-control positions.

PE is increasingly active in Indian D2C as brands reach ₹100-500 Cr ARR with strong repeat economics. PE capital typically funds distribution expansion and operational efficiency, not growth-at-all-costs.

A scheme granting employees equity or options in the company they work for, typically vesting over several years. An ESOP liquidity event lets employees sell vested options for cash before an IPO or exit.

Companies running frequent ESOP liquidity events outside a normal annual or pre-IPO cadence are often signaling either sustained valuation confidence or an active retention play against talent poaching.

A funding round where an existing investor puts in additional capital, distinct from a new round led by a new investor. Often smaller than the original round and doesn't necessarily involve a new valuation negotiation.

A follow-on from an existing investor usually signals operating confidence more than it signals a step-up in valuation, existing investors already have the numbers, they don't need a new pitch.

A ledger showing who owns what percentage of a company, founders, employees, and investors, across every funding round. Tracks equity dilution over time as new rounds are raised.

A messy or heavily diluted cap table can complicate later fundraising or an IPO, investors scrutinize it closely to understand founder control and prior investor rights.

Outsourced logistics providers that handle warehousing, order picking, packing, and last-mile delivery on behalf of D2C brands. Examples: Delhivery, Shiprocket, Shadowfax, Xpressbees.

D2C brands typically use 3PLs until fulfilment volume justifies in-house infrastructure.

A retail location closed to walk-in customers that functions purely as a fulfilment hub for online and q-commerce orders. Stocked with fast-moving SKUs and located within 2-3 km of dense consumer clusters.

Q-commerce platforms operate networks of dark stores. A D2C brand's ability to get shelf space in dark stores in a city directly determines its q-commerce reach in that market.

A small-format, high-density warehouse typically under 5,000 sq ft, positioned close to urban demand clusters to enable fast fulfilment. Flipkart has scaled to 1,000+ MFCs across India to power Flipkart Minutes.

The MFC build-out by Flipkart and Amazon signals a structural shift in ecommerce infrastructure toward near-instant fulfilment, which eventually raises consumer expectations for all D2C delivery.

The final leg of the delivery journey, from the nearest hub or dark store to the customer's doorstep. Last-mile is the most expensive and logistically complex portion of fulfilment, typically 40-60% of total delivery cost.

Last-mile cost, delivery speed, and COD handling quality directly affect D2C return rates and customer satisfaction scores.

A large-format warehouse where a brand's full SKU range is stored, orders are picked and packed, and inventory is managed before dispatch to 3PL carriers or dark stores. Distinct from a dark store in scale and function.

D2C brands typically begin with a single fulfilment centre and expand to regional FCs as volume grows and delivery-time expectations tighten.