The Direct-to-Consumer (D2C) ecosystem of India was marked by what founders of such a system often called CAC chaos. It was a period when Customer Acquisition Costs (CAC) continued to spiral out of control on the powerful platforms such as Meta and Google. With the auction of paid media growing overcrowded and competition becoming serious in the popular categories, bid prices rose to unsustainable levels. Several D2C companies noticed their margins were rapidly eroding, and they were seriously re-examining the long-term viability of relying almost solely on performance marketing channels to expand their business.
Strategic change
There is a radical, long-term transformation of the landscape, based on a fusion of need in the market and real innovation. D2C brands are not just paying to acquire their traffic through expensive advertisement placements but are actually trying to create it by changing their mindset towards their operations. They are abandoning the methods of acting mostly as advertisers and are taking the playbooks of online creators. It is the short-form video formats that have become the new and essential battleground of organic discovery.
This is not just a strategic change, but according to industry observers, it is a life and death move. Social platform algorithms are progressively engineered to place more emphasis on and reward authenticity over slickness, and it is also true that, at the same time, modern consumers favor brands that are truly showing, not selling.
In the case of emerging D2C brands, particularly, having a solid organic content pipeline serves as an essential cushion against the infamous unpredictability of paid media prices. This organic strategy has been shown in a number of recorded cases to be more successful than costly adverts altogether.
The obvious outcome of this strategic shift is a gradual expansion of organic traffic throughout the D2C ecosystem. Major brands have their statistics stating that about 50 percent of all their traffic comes in as organic. Repeat customers, social discovery, search engine optimization (SEO), and direct visits are some of the factors that drive this organic portion. Although the paid channels are still retained in the strategic and need-based role, the organic stream has already proven to be the more stable and considerably more economical engine in the overall marketing mix.
Content playbook and diverse retail categories
Such a transformation in traffic flow can be observed in different categories of retail. Chetan Siyal, CMO and founding member of the brand Snitch, affirmed that in the last two years, the competition in the fashion category and the increase in the acquisition cost became intense, forcing the brand to develop. Snitch has also changed its performance-first strategy, adopting a more balanced model, in which brand-building and channel-ownership have become equally important.
Siyal observed that at a time when paid campaigns continue to be essential to provide scale where necessary, an increasing share of their budget is now allocated to community building, content creation, retention campaigns, and innovations, such as their 60-minute delivery service in Bengaluru, which all effectively alleviate long-term acquisition pressure. In the case of Snitch, organic sources are currently contributing between 55% and 60% of the brand traffic, and the other 40 to 45% is through paid channels.
Fixderma, a brand that is both dermatologist-approved and prescribed, has been affected by the increasing CAC moderately in the specialized skincare industry since it has a different demand funnel. CEO and Co-Founder Shaily Mehrotra pointed out that a major portion of their demand is referral by medical recommendation, and, by its nature, reduces their customer acquisition cost to that of other brands, depending entirely on performance marketing.
Beyond high-campaign and festive programs where advertising expenses force traffic to the paid model, Fixderma experiences healthy organic flows due to on-ground campaigns like college activations and bus branding, which work well to create awareness that drives subsequent organic search and direct traffic. Brune & Bareskin currently has a traffic that is around 40% organic, including direct visits, social media, and search.
In the opinion of industry experts, D2C brands must focus on long-term brand objectives rather than short-term Return on Investment (ROI). Guru Mishra, the Senior VP-Media at RepIndia, emphasized the need to have owned properties, better communication, and a more diversified media mix that goes beyond Google and Meta to creator collaboration, Connected TV (CTV) and Over-the-Top (OTT) platforms, and hyperlocal advertisements.
Mishra had pointed out specifically that organic and paid traffic serve various purposes, but organic discovery always provides credible traffic and a higher ROI in the long run. He further contributed that, in the event of long-term SEO initiatives, over two to four years, organic traffic could outperform the paid traffic, resulting in a far healthier overall traffic curve and reduced CAC.
Short-form video is the most effective content format in terms of performance. The most effective formats are User-Generated Content (UGC), explainers, behind-the-brand storytelling, and educational videos, which can inspire greater engagement and retention, create authenticity and trust on scale.
In the case of Snitch, brand films are no longer effective travelers; rather, genuine short-form films such as Reels with speed and personality, UGC, and trend-inspired creative that quickly capitalizes on cultural moments are more effective. In the case of Fixderma, UGC-style content suits best since real-life individuals who share their real skin issues and share their progress in weeks would be the most effective, as they provide real evidence of the product’s efficiency.
Conclusion
The agreement between the leaders of the brand is that performance marketing and organic growth are not competing priorities, but parallel engines that lead to different results. Performance marketing provides the necessary speed, volume, and predictable surges of traffic to some key launches or moments, whereas organic growth is handled as a vital brand asset in the long term, which establishes equity, reliability, and future productivity. The need to handle CAC anarchy has essentially forced the D2C brands in India to transform from competitive advertisers into assertive creators. The brands that previously only depended on the visibility obtained via auction are now learning to gain attention by being repeated, relatable, and providing consistency and authenticity in their content.
Read the full article here
