Geopolitical conflicts are impacting the business operations of India’s direct-to-consumer (D2C) startups, leading to increased costs for packaging, raw materials, and logistics, according to Inc42.
The rise in crude oil prices due to these conflicts has tightened global supply chains, impacting petrochemicals, logistics, and manufacturing inputs. This macro shock is filtering into the consumer internet economy, especially for D2C brands reliant on packaging and global supply networks.
Packaging costs are increasing due to the rise in prices of oil-linked derivatives. Laminate prices have jumped from ₹200-220 per kg to ₹270-290 per kg in the last two weeks, according to Mansi Baranwal, founder of Troovy. Manish Chowdhary, founder of WOW Skin Science, noted a 60-70% spike in certain packaging components and a 30-35% increase in raw material costs for beauty and personal care products.
The increase in packaging costs is impacting margins for D2C startups, many of which already operate on thin margins. Input costs across FMCG supply chains are up 6-10%, with further increases expected. Packaging can account for 30-35% of the product cost for categories like sauces, making them disproportionately exposed to cost shocks.
The current environment is also reshaping how D2C brands manage their supply chains. Disruptions are affecting availability and production capacity. A dinnerware brand founder noted that nearly 50% of ceramics factories have shut down temporarily in India due to gas dependency.
D2C brands are approaching a decision on whether to pass on these cost increases to consumers or absorb them in their margins. While most brands are in a wait-and-watch mode, Troovy’s Baranwal noted that a minimum 5% price hike is expected. The dinnerware brand founder stated that a 10-15% price increase may be necessary.
Secret Alchemist, a D2C beauty and personal care startup, raised $3 million in seed funding led by Unilever Ventures, with participation from DSG Consumer Partners, to fuel expansion, R&D, and team building.
Beauty and personal care startup Innovist is reportedly in discussions to divest a majority stake to L’Oréal, at a valuation of $350 million to $450 million. Assiduus, which helps brands launch and scale across global ecommerce marketplaces, raised $25 million in its pre-Series B round led by Bajaj FinServ. D2C design and lifestyle brand DailyObjects forecasts a 2X jump in its FY26 net revenue to around ₹230 Cr. Water purifier brand DrinkPrime raised ₹20 Cr in its extended Series A round at a valuation of ₹340 Cr.
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