How fintech innovations are changing the retail landscape

India’s Direct-to-Consumer (D2C) market is exploding and changing the face of retail in the country. D2C allows brands to sell directly to consumers, cutting out the middleman and enabling personal relationships and streamlined processes. This has taken off in India with increased internet penetration, the surge in smartphone usage, and consumers preferring convenience and direct brand engagement.

As per a KPMG report, the Indian D2C market was $ 12 billion in 2022 and is expected to touch $ 60 billion by 2027, growing at 40% CAGR. This data also reflects Statista’s growth, which says India’s total addressable D2C market will grow 15x from 2015 to 2025.

The rapid adoption of digital-first strategies and evolving consumer preferences have been a turning point for the D2C sector, driving a revolution in how brands in different industries engage with their customers. As digital transformation accelerates, companies must continuously innovate to maintain direct connections with their audience. This change has led to a booming world of D2C brands in fashion, beauty, electronics and personal care. Over time, shoppers increasingly prefer brands that have a wide range of products and make it easy to shop online and engage with the company.

Fintech breakthroughs have played a key role in the quick growth of India’s D2C sector. How we pay has changed drastically in the past ten years, with new platforms and tools to make digital payments safe, smooth, and quick. Taking real-time payment systems, for instance, they have made transactions much easier for companies and shoppers alike. These systems help brands speed up checkouts, reduce the number of people leaving items in their carts, and build trust with customers through safe ways to pay.

Innovative solutions such as no-code platforms allow businesses to integrate payment gateways without extensive coding, enabling rapid deployment of online stores. Features like split settlements facilitate the automatic distribution of payments among multiple stakeholders, streamlining financial operations. Additionally, advanced checkout options such as one-click checkout and smart pre-filling of customer information are designed to significantly reduce cart abandonment rates by streamlining the purchase process, while enhancing the user experience with quick and efficient payment solutions.

For small business owners, assisted e-commerce solutions have played a transformative role, enabling them to sell products online without needing prior investment in inventory. These models help merchants manage stock efficiently while minimising financial risk, making it easier to enter the digital marketplace.

Fintech has made a major impact by developing solutions for India’s diverse population. With a mix of urban and rural customers, innovative payment solutions offering multi-lingual interfaces, offline-to-online integrations, and alternative methods like UPI have helped bridge the digital divide within the country. Such advancements have created a conducive environment for D2C brands to succeed by addressing diverse consumer needs.

Certain technical innovations, such as mobile wallets, buy now, pay later services, and real-time payments, have become indispensable tools for direct-to-consumer firms as they lower cart abandonment and provide flexible buying options. These solutions increase conversion rates and enhance cash flow by reducing payment delays.

Fintech-driven data analytics also assist companies in streamlining their processes. By observing consumer behaviour, brands can more accurately predict demand, control inventory, and tailor marketing tactics.

Additionally, automated financial technologies allow organisations to scale more rapidly by improving payroll efficiency, invoicing, and other backend activities.

The push for financial inclusion through fintech innovations has expanded access to D2C brands. UPI, mobile wallets, and digital lending have encouraged millions of underbanked individuals to shop online, particularly in rural areas. This has opened new consumer segments for D2C brands, contributing to their growth within the country.

In conclusion, fintech has been central to the rapid growth of India’s D2C market. From secure payment solutions to financial inclusion tools, fintech innovations have authorised brands to streamline operations, improve customer experience, and scale rapidly. As the D2C sector expands, utilising fintech will remain essential for businesses to stay competitive and succeed in the evolving retail landscape.

This article is authored by Kunal Jhunjhunwala, founder, Airpay.