India's Fashion Reset and the Growth Playbook for 2026

After nearly a decade of rapid D2C expansion fueled by discounts, performance marketing, and aggressive scaling, 2025 marked a structural reset for India's fashion sector. Growth did not slow, but it became more deliberate. Across segments, brands began prioritising durability over velocity, focusing on unit economics, inventory discipline and brand trust rather than chasing short-term topline gains.

This shift is playing out against a backdrop of continued market expansion. India's online fashion market, part of a broader USD 110 billion apparel industry, has grown to roughly USD 11 billion and is projected to reach USD 35 billion by 2028, expanding at nearly 25 per cent CAGR.

The opportunity remains large, but the playbook is changing.

The Shift from Scale to Sustainability

While consumer demand remains strong, brands are increasingly selective about how they grow. Industry analyses suggest India's D2C sector could cross USD 100 billion by the end of 2025, and expand to a USD 300 billion opportunity by 2030. Yet founders say growth today is less about ubiquity and more about consistency.

"Consumers today discover brands faster, but they decide more slowly," says Mohit Jain, Founder and CEO of Miraggio, adding, "Discovery is happening across social, creators and peer recommendations, but repeat buying is driven by product quality, consistency and how well a brand fits into everyday life. Growth is less about being everywhere and more about being memorable and reliable."

A similar shift is visible at ARK, an Indian fashion brand. Co-founder and CEO Abhinav Verma notes that while visibility remains important, it no longer guarantees loyalty. "Excitement may trigger a first purchase, but certainty drives repeat behaviour. For us, growth in 2026 is less about being everywhere and more about being reliably chosen," he says.

End of Discount-Led Momentum

One of the clearest markers of maturity has been the industry's renewed focus on inventory and margins. Reports tracking fashion D2C strategy highlight a sharp move towards AI-driven demand forecasting, predictive assortment planning and faster replenishment cycles to curb overstocking and markdown dependence.

At Miraggio, Jain says the internal metrics that matter most now reflect real demand rather than inflated sales. "We're closely tracking repeat purchase rates, full-price sell-through and inventory ageing. These tell us whether demand is genuine or artificially driven by discounts. Flexibility and speed in the supply chain matter more than scale."

Verma echoes this emphasis on durability-led metrics. ARKS closely monitors inventory velocity, return behaviour during scale periods and pricing resilience without heavy discounting. "When customers return organically, inventory turns predictably and margins remain stable, we know we're building a business that can compound rather than spike," he says.

Large legacy players are thinking along similar lines. At Kewal Kiran Clothing Limited, Joint Managing Director Hemant Jain says sell-through, category-level demand signals and replenishment timelines are central to planning. "Consumer preferences are evolving faster, so supply chain agility is critical. On the customer side, repeat purchase rates and style-level performance help us grow with greater predictability," he adds.

Omnichannel is No Longer Optional

If early D2C growth was defined by platform-first strategies, 2025 underscored the importance of omnichannel presence. Funding patterns reflect this shift. Men's ethnic wear brand Kisah Apparels raised INR 13 crore in angel funding at a valuation of around INR 100 crore to deepen its D2C and offline footprint, while jewellery brand GIVA secured INR 102 crore in Series B2 funding, combining equity and structured debt to expand physical retail.

Founders say offline is increasingly tied to trust and conversion rather than just expansion. "Consumers don't separate marketplaces, social media or offline the way brands used to," says Miraggio's founder, adding, "Marketplaces help with reach, social platforms help with storytelling, and offline builds trust. The key is consistency across touchpoints."

Verma agrees that different channels now play distinct roles. "Marketplaces drive discovery, but owned environments are where long-term brand value is built. Offline retail, especially in categories where fit and feel matter, has become important for confidence and credibility."

Consumers Grow Intentional, Not Impulsive

Behind these strategic shifts lies a clear change in consumer behaviour. Data shows that earlier-than-usual festive shopping cycles in 2025 drove nearly 16 per cent year-on-year growth in pre-festive orders across fashion and lifestyle categories, signalling both confidence and planning among buyers.

Fabindia's President of Apparel, Sumit Arora, says consumers are increasingly buying with intent rather than impulse. "Shoppers became far more intentional—curating looks, spaces and gifts that told a story," he says, adding, "There was a clear move toward natural fabrics, rich textures and handcrafted details that balanced comfort with elevated elegance."

According to Arora, the shift extended beyond apparel into home and gifting as well. "Style, décor and gifting were no longer transactional; they became expressions of individuality. Consumers chose craft with purpose, blending tradition and contemporary living."

Scale, Premiumisation and Widening Spectrum

Last year, the sector's evolution became clear at both ends of the market. Tata Group's Zudio showed how scale and consistency can drive leadership, while premium brands like Sabyasachi strengthened their global position through craftsmanship and storytelling. At the same time, Nykaa's fashion and lifestyle verticals grew 21 per cent, highlighting how trust in one category can extend into fashion.

Looking ahead, founders and executives agree that the next phase of growth will favour restraint as much as ambition. Investments are shifting away from pure acquisition towards design capability, data-led decision-making and supply chain agility.

"The brands that will win are those that balance creativity with operational discipline," says Miraggio's Jain. Verma adds that reducing volatility will be key. "Strong planning systems, disciplined expansion and clarity on what not to do will matter as much as speed."

For legacy players like Kewal Kiran, the path forward lies in sharper product DNA and technology-backed operations. "Sustained brand building, design innovation and data-driven execution will define durability in an increasingly competitive landscape," Hemant Jain says.