Indian Brands Told to Cut Channels That Only Cannibalise Revenue

A channel that loses 80 per cent of its revenue to your existing channels within a quarter is not a channel. It is, in the words of Ashmeer M. Sayyed, consultant and former Chief Retail Officer at DaMENSCH, "a cost centre with a discount attached."

That blunt arithmetic sits at the centre of a growing argument among Indian fashion brands: the question is no longer how many routes to the consumer a brand can open — D2C sites, marketplaces, quick commerce, physical retail, wholesale, social commerce — but which of them actually add growth. The right question, one expert frames it, is not "Where else can we sell?" but "What does this channel add that we don't already have?"

How do you test whether a channel adds anything?

Sayyed proposes a shutdown test: "If you shut this channel down tomorrow, would that revenue disappear entirely, or would 80% of it simply reappear in another channel within a quarter?" The answer should be tracked over a proper stretch of time, not a launch month, since launch months are flattered by curiosity and promotional spend.

Scale is not the criterion either. Chetan Siyal, CMO of menswear label SNITCH, warns that brand-channel fit matters as much as audience size. "A premium brand sitting on a discount-heavy marketplace listing, competing purely on price, is doing damage to itself that no sales number in that channel will show you," he said. His harder-won lesson: "not to confuse access to a large audience with access to the right customer." A channel with millions of users still fails if customer intent, price expectations or economics do not align.

Operational readiness is the underestimated third test. "Whether the brand actually has the team, the inventory discipline and the fulfilment capability that this channel demands is important to establish; otherwise an already thin operation gets stretched to be even thinner," said Sayyed.

What does the economics look like beyond topline?

The arithmetic must run past gross revenue, brand executives say. The relevant figure is contribution margin after channel-specific costs: commission, logistics, returns processing, mandatory platform advertising spend, and working capital locked in the channel's inventory cycle.

Return rates deserve equal scrutiny. A channel with an attractive headline margin and a punishing return rate can quietly erode that margin once a product comes back, is reprocessed, and ends up fit only for markdown. Customer acquisition cost must be weighed against lifetime value; a channel that is cheap to enter but expensive to acquire a loyal customer through is no bargain.

Udaipur-based BEYOUNG applies the full spreadsheet. "BEYOUNG therefore looks beyond topline sales and considers metrics such as gross margin, net realisation, channel commissions, discount levels, return and RTO rates, logistics costs, customer acquisition cost, contribution margin, average order value, repeat purchase behaviour and inventory efficiency," said Co-Founder Shivam Soni.

Not every channel needs identical economics from day one, Siyal concedes. "Sometimes a channel has a strategic role, whether that is acquiring new customers, entering a new geography or increasing brand discovery. But you should be very clear about why you are accepting those economics and what you expect the channel to eventually deliver," he said.

Should each channel carry different stock?

Once a channel passes the test, the assortment should differ from every other one. A D2C site can carry the full range, including the newest and most premium launches, because that shopper has come specifically for the brand. A marketplace shopper compares brands within one search result, so best-selling, price-competitive lines perform there while niche pieces sit unsold, dragging inventory turns.

Wholesale needs depth in proven, high-velocity styles; those channels live on sell-through at volume, not storytelling. Physical retail demands a sharper edit. Sayyed's verdict: "A new store is a laboratory, not a museum of your full catalogue."

SNITCH opens new stores with the top 30 to 40 per cent of the range by revenue contribution, stocked in depth. "I don't believe in blindly replicating 100% of the assortment everywhere," said Siyal. "The brand should remain consistent, but merchandising should respond to how people actually shop on that channel. Otherwise, you are optimising for operational simplicity rather than the customer."

Quick commerce pushes the logic furthest. Accessories brand Hexafun has found its immediacy-led winners are narrow: caps and socks. "Socks and caps are classic last-minute purchases. Additionally, customers often opt for value packs to meet minimum order thresholds or free delivery requirements, which increases average order value while maintaining strong conversion rates," said Co-founder Manali Sanghvi.

What does this change for sourcing and planning teams? Assortment, inventory depth and margin modelling now need to be built per channel, not per brand — and the channels that cannot pass the shutdown test should expect to lose their listings.