66% of New D2C Orders Come from Smaller Cities: Unicommerce

India’s online shopping landscape is undergoing a noticeable shift as consumers beyond major metropolitan areas increasingly turn to digital platforms. With rising internet penetration, improved logistics and growing trust in online transactions, smaller towns and cities are playing a larger role in shaping the country’s e-commerce growth story. This trend is particularly visible in the D2C segment, where brands sell directly to customers through their own digital channels.

According to an analysis by Unicommerce, nearly 66% of new D2C orders in the financial year 2026 originated from Tier II and Tier III cities. The data highlights a clear shift in consumer demand away from metro cities toward a more geographically distributed base. These smaller markets also contributed around 60% of the incremental gross merchandise value (GMV) compared to the previous financial year, underlining their growing importance in overall revenue expansion.

The broader D2C sector continued its upward trajectory during the period, with order volumes increasing by 33% and GMV rising by 32% year-on-year. The findings are based on more than 400 million order items processed through brand websites using Unicommerce’s Uniware platform between April 2024 and February 2026. Insights were drawn from over 6,000 digitally native brands, offering a comprehensive view of evolving consumption patterns across the country.

As demand spreads across regions, brands are also focusing on improving fulfilment and delivery processes. Data from Shipway, the company’s logistics platform, indicates that return-to-origin (RTO) rates dropped significantly from nearly 39% during the festive season in November 2025 to about 21% by February 2026. While higher RTO rates are typically seen during festive periods due to increased order volumes, first-time buyers and reliance on cash-on-delivery, the decline suggests better operational efficiency. Improvements in order verification and delivery execution appear to be contributing to this trend.

Technology is also playing an increasingly important role in shaping customer experiences. From product discovery to post-purchase engagement, artificial intelligence-driven recommendations and chat-based interactions are helping brands deliver more personalised services. These tools are enabling businesses to better understand customer preferences and respond more effectively to changing expectations.

India’s D2C market, currently estimated at USD 10–12 billion is projected to grow significantly, reaching around USD 60 billion by 2030. As the sector matures, operational efficiency, customer retention and consistent service quality are expected to become key differentiators for brands. The expanding reach of e-commerce into smaller cities, combined with technological advancements, suggests that the next phase of growth will be shaped by both scale and sophistication in execution.