Smaller D2C brands take a hit as India-Pakistan conflict dents consumer sentiment

Smaller D2C brands hit by sales slump as India-Pakistan tensions dent consumer sentiment

On a typical Saturday, Harneet Singh, founder of fashion jewellery brand Jewels Kafe, sees a steady spike in sales but not this week . “Today, we’ve seen a significant dip — even more than on weekdays,” Singh told Moneycontrol on May 10. “Sales are down by almost 25 percent this week. Ad spends remain the same but there are just not enough orders.”

The escalating tensions between India and Pakistan have had a ripple effect — a sharp slowdown in consumer spending, which has hit smaller direct-to-consumer (D2C) brands particularly hard.

Since May 7, when India hit terror targets in Pakistan and Pakistan-occupied Kashmir, online orders have dropped, several founders told Moneycontrol. Advertising spends are no longer yielding expected returns, as consumer attention has shifted from shopping to the conflict, they said.

“We’re seeing lower ROAS (Return on Ad Spend),” Singh added. “And we’re unsure whether to ramp up spends to push demand or scale them down to cut losses. As manufacturers, we’re also trying to decide how much inventory to produce – and that’s tough when visibility is so low.”

Beyond the shift in mood, logistical disruptions in key northern and western states have added to the challenge.

E-commerce deliveries in parts of Jammu and Kashmir, Rajasthan, and Gujarat have been temporarily affected, as companies exercise caution amid heightened military activity and regional restrictions, Moneycontrol wrote earlier.

For Ludhiana-based fashion brand Mlada, the dip in orders may not be drastic but it’s telling. “There has been a slight 10-20 percent dip in sales due to a reduction in returns on ad spends,” said founder Akshay Jain. “General spending has gone down – people are distracted. Shopping just isn’t a priority right now.”

Several areas of Punjab, of which Ludhiana is a part, have come under Pakistan fire, which has launched drone strikes on air bases and villages in the border state. Though most of the attacks have been repelled, some people have been injured and there has been some damage to property as well.

In some regions, brands say there’s a layer of uncertainty not just around demand but fulfilment. While delivery slowdowns are expected to ease within days, the volatility has made planning difficult, especially for inventory-heavy categories.

“Even if orders do come in, there’s a sense of unpredictability — will they get delivered on time, will customers cancel?” said the founder of a D2C apparel brand, requesting anonymity.

Brands that sell essentials are holding steady. “There has not been any dip in our sales at all,” said Aditya Ruia, co-founder of sustainable home and kitchen brand Beco. “Our products are not discretionary, they’re part of daily household needs.”

An executive at a well-known healthy snacks brand said the same. “It’s too early to say if there will be an impact. So far, we haven’t seen any meaningful dip,” the executive, who did not wish to be identified, said.

For small and mid-sized D2C brands, the convergence of slowing consumer sentiment and regional delivery headwinds have added a layer of uncertainty. With tensions still unfolding and customer attention elsewhere, many are bracing for a subdued fortnight ahead.