India’s direct-to-consumer playbook has been built on paid acquisition. A December 2025 study by DSG Consumer Partners found that more than 70% of surveyed D2C brands use Meta as their primary customer acquisition channel. But as more brands chase the same shoppers, experts argue that performance marketing alone will not carry a brand to Rs 100 crore.
The auction math is turning on brands
Digital advertising is priced by auction. More bidders chasing the same audience push prices up, especially during festive periods. Vivek Bhargava, co-founder of consumr.ai, put it simply: “Digital media is priced by auction, so the cost of acquiring a customer is a direct function of how many brands are bidding for the same person.”
That cost pressure becomes a margin problem. As Gopa Menon noted, when customer acquisition cost rises faster than average order value or customer lifetime value, “growth can quickly become a margin problem.” A brand can report strong revenue while discounts, shipping, returns and media spend quietly erase profit.
Why paid reach keeps getting less efficient
The squeeze is not just about pricing. The same DSGCP playbook found 62% of founders cite creative fatigue as a major bottleneck; ads that run repeatedly simply wear out. Saurabh Parmar, fractional CMO, added that frequent sales have made discounts predictable. “When it becomes this frequent, the surprise factor goes away. The buyer knows the next sale is around the corner, so they wait.”
The Rs 100 crore path runs through brand building
The playbook maps four stages on the road to Rs 100 crore:
- Rs 0-1 crore: prove product-market fit.
- Rs 1-10 crore: build repeatability and retention.
- Rs 10-50 crore: add operational and analytical maturity.
- Rs 50-100 crore: win category leadership and brand defensibility.
Rahul Vengalil drew the lesson: if a brand is not in the consideration set, “your cost of acquisition will be immense.” Awareness investment made early changes the economics later.
From last-click CAC to customer value
Experts disagree on how far brands should pull back from Meta and Google. Menon called these platforms “powerful discovery and conversion engines” and said the rethink is about overdependence, not exit. Parmar argued for cutting reliance, understanding the ideal customer profile beyond basic demographics, and building lifetime value and referrals from existing customers.
The common thread is measurement. Only 41.3% of surveyed brands track customer lifetime value as a primary retention metric beyond ROAS. Bhargava’s rule: know the value of each customer, then buy the customers whose value is five times the cost of acquiring them.
That math also depends on category. Vengalil asked what happens when a replacement purchase is eight years away. Groceries and cosmetics offer frequent repeat opportunities; durables and mattresses do not.
The real advantage, Menon said, belongs to “brands that don’t have to pay to reintroduce themselves to the same customer every festive season.”
Source: BMI Publications Private Limited
