D2C Is India's Biggest New Store Tenant — Why Online Brands Are Going Offline in 2026

The story Indian D2C told itself for a decade was that stores were the old way — capital trapped in rent and inventory, a burden legacy brands carried and digital-native ones had cleverly escaped. Asset-light, online-only, scale through ad spend and marketplaces. It was a good story, and for a while the economics agreed with it. Then quick-commerce commissions climbed, customer-acquisition costs kept rising, and a lot of founders discovered that "asset-light" also meant "dependent on platforms whose take rate they didn't control." The clever escape started to feel like a cage.

So the smartest D2C brands did something that would have sounded heretical a few years ago: they started signing store leases. And not at the margins — in the first half of 2026, according to CBRE South Asia's report covered by Businessworld and Indian Retailer, D2C brands became the single biggest driver of new retail leasing in India. This isn't nostalgia; it's a channel-strategy and unit-economics decision. This post lays out the data, the margin logic behind the move, where the money is actually going, the trap that catches brands who rush it, and how to test offline without betting the whole brand.

The data: D2C is now India's biggest new store tenant

The numbers are what make this more than a few press-release flagship openings. CBRE's H1 2026 report puts D2C brands at 28% of India's total retail leasing, up from 23% a year earlier — the largest single share of any tenant type. That sits inside a market growing overall: organised retail leasing rose about 20% year-on-year to roughly 3.9 million square feet in the first half of 2026, and domestic retailers, not international chains, drove more than 70% of it. The brands built online are now leading the move into physical space.

What the numbers say about who and where

The detail matters. Within D2C leasing, fashion and apparel led at 69%, with homeware and furnishings around 12% and jewellery near 7%. Geographically it concentrated in Delhi-NCR at about 35%, Chennai at roughly 17%, and Mumbai at around 15%. Read that together and the pattern is legible: categories where a customer wants to touch the product before buying are opening the most stores, and they're doing it in the metros with the footfall to justify premium rent. Beauty is visibly in the mix too — MARS Cosmetics, for instance, has been reported (Exchange4media, May 2026) to have scaled past 51 exclusive outlets alongside 280-plus modern-trade and 3,000-plus general-trade touchpoints, with its leadership stressing sustainable retail productivity over land-grab expansion.

Why online-first brands are opening physical stores

Two forces are pushing brands offline, and they're related.

Quick-commerce economics and the margin squeeze

Selling through quick commerce and marketplaces is fast, but it isn't free or fully yours. You pay a commission on every order, you compete on the platform's terms and beside its own private labels, and you rent the customer relationship rather than own it. Layer on paid-acquisition costs that keep climbing, and contribution margin gets squeezed from both ends. Owned stores and modern-trade distribution give a brand back the levers it lost: control over price, over shelf presence, over the first-party customer data that platforms keep. A store is a hedge — when one channel's economics turn, you're not wholly exposed to it.

Stores as a trust and discovery layer

The second force is brand-building. A physical store lets a customer feel the fabric, test the shade, see the finish — the exact reassurance an image and a return policy only approximate. Reported examples of digital-first brands moving into stores span categories, from health and personal care to accessories, and the framing from founders is consistent: the store is a trust and discovery channel first, a revenue-per-square-foot machine second. Discovery offline feeds conversion online, and vice versa. The two channels compound instead of competing, which is the whole point of doing both.

Where the offline money is going

Here's the shape of the shift in one view.

The move isn't a rejection of digital — these are still digital-first brands. It's an admission that a brand distributed through only one type of channel is fragile, and that owning some of your distribution is worth the cost when the alternative is depending entirely on someone else's platform. Building that kind of full-funnel, cross-channel engine — where online and offline feed each other rather than fight — is exactly the sort of problem our growth marketing work is built to solve.

The trap: offline can eat the margin it's meant to protect

None of this is a licence to sign a lease. The same move that hedges your economics can wreck them if you rush it, because a store's costs are fixed and its footfall isn't. Rent, staffing, fit-out and store logistics all bill you whether or not customers walk in, and a flagship in a premium metro location can burn the very contribution margin the offline push was supposed to defend. Every honest account of this trend flags the same risk: the winners expand with discipline and capital efficiency, the losers chase store count as a vanity metric and discover too late that "we opened ten stores" and "we opened ten profitable stores" are very different sentences. Offline rewards the patient and punishes the impatient more harshly than digital ever did, because you can't switch a lease off the way you pause a campaign.

How to test offline without betting the brand

Treat your first store as an experiment, not a monument. Start with a clear hypothesis — which city, which customer, what it should prove — and a real store-level P&L you'll hold yourself to. Prefer lower-commitment formats before flagships: a shop-in-shop, a modern-trade listing, a short-lease pop-up in one strong metro. Then measure two things honestly: the store's own profitability, and the halo — did your online sales in that city lift once people could touch the product? Scale only what clears both bars, and be willing to close what doesn't. The brands leading India's retail-leasing surge aren't the ones who believed hardest in stores; they're the ones who tested carefully and expanded only where the maths worked.

The takeaway

The asset-light, online-only D2C model didn't fail — it revealed its limit. Depending on channels whose economics you don't control is a fragile place to build a brand from, and in 2026 the fastest-growing Indian D2C brands answered that fragility by becoming the country's biggest new store tenants, taking 28% of retail leasing to buy back margin control, resilience and a physical trust layer. The lesson for your brand isn't "open a store" — it's "own more of your distribution, carefully." Pick one channel-diversification bet you could test in a single strong market this quarter, put a real P&L behind it, and measure both store profit and the online halo before you scale. If you want help thinking through your channel mix and the unit economics under it, book a free call and we'll map it with you.