Are D2C a real challenge to legacy brands?

From Growth at All Costs to Profitable Omnichannel Scaling

Executive Overview

The Fast-Moving Consumer Goods sector is emerging from a decade-long experiment in Direct-to-Consumer retail. From 2015 to 2021, thousands of digitally native brands launched, promising to disrupt global incumbents by selling directly online. Venture capital flowed freely, digital advertising was inexpensive, and targeting was exact. The model rewarded high revenue growth and future market potential rather than commercial fundamentals.

The environments in 2024 and 2025 look very different. Capital has become expensive, customer acquisition costs have soared, and inflation has eroded already-thin margins for everyday products. The result is a decisive shift from a “growth at all costs” mentality to a “profitable growth” mandate. D2C is no longer viewed as a standalone model capable of scaling mass-market FMCG. It is now a complementary channel whose strength lies in brand building, data capture and loyalty, while wholesale retail remains essential for profitable volume.

Only a small number of digitally born FMCG businesses have successfully adapted. Most others are facing declining sales, profitability challenges, and in some cases bankruptcy or acquisition under distress.