The Indian consumer and the paradox of trust

Indian consumers aren’t exactly “the trusting type,” right?

We’ve heard some version of this sentiment so often that it almost sounds like universal truth. But is it really? Or is it just one of those things we stopped questioning because it’s so commonplace?

Before challenging the notion, let’s explore the impact of it in India’s growing Direct-to-Consumer (D2C) space.

The steep cost of unchecked assumptions

Many D2C brands in India operate under the belief that Indian consumers are inherently distrustful of newer or lesser-known brands.

This perception often leads to business challenges like:

• Low trust → Low conviction → Higher cart abandonment rates 
• Low trust → Low confidence → Heavy tilt towards Cash-on-Delivery (COD)
• Low trust → Overreliance on discounts → Unsustainable growth

But if Indian consumers are truly skeptical by nature, how do we explain the instant acceptance of products from brands like Tata, ITC, or Hindustan Unilever? A new Tata product hits the supermarket shelves, and shoppers immediately throw it in their carts without a second thought.

The answer, of course, lies in a single word: trust.

These legacy brands have spent decades cultivating deep consumer trust. For many Indians, names like Tata and Amul are synonymous with quality and reliability, proving that trust—not just price—drives purchase decisions.

Instead of tackling the perceived “lack of trust” by treating its symptoms—such as removing COD options or offering excessive discounts that hurt margins—D2C brands should instead focus on proactively building trust with their customers.

But can new-age brands replicate the kind of trust Tata or ITC have built over decades?

At Shopflo, we’ve seen D2C brands across the trust spectrum. 

On one end, some brands struggle to retain customers despite strong acquisition numbers. The implication? Their brand promise inspires trust, attracting first-time shoppers—but the product fails to deliver on that promise, leading to low retention.

On the other end, we’ve seen brands with stellar retention rates, where loyal customers drive more revenue than new acquisitions. For these brands, the product consistently exceeds expectations, building trust with returning shoppers, while the brand promise to first-time shoppers pales in comparison. 

It’s no secret that repeat customers are the cornerstone of profitability in D2C. However long-term success requires trust at two levels:

• Your brand promise: to attract first-time shoppers through a strong point of view, effective advertising, and relatable presence on social media.
• Your product experience: to give shoppers a reason to keep coming back through standout quality, thoughtful packaging, and reliable customer support.

But in an ideal world, you need to build trust both through your brand promise (this extends to social media, positioning, advertisements etc) and your product (this extends to packaging, taste, quality, differentiator, etc)

If your brand is struggling to attract or retain customers, it might feel convenient to assume that distrust is widespread across the nation. However, the reality is quite the opposite.

The truth? India is one of the most promising markets when it comes to brand loyalty. Focus on building trust the right way, and Indian consumers will reward you with their loyalty time and again.

Numbers don’t lie (but some brands do)

A 2019 KPMG survey found that while 59% of global consumers remain loyal to their favorite brands, the number jumps to an impressive 74% in India. 

The same survey also revealed that for Indian consumers, loyalty isn’t given lightly—it’s earned through a combination of  value for money and perceived trustworthiness.

Rama Bijapurkar, author of Lilliput Land: How Small is Driving India’s Consumption Story, provides further insight in BCG’s The CEO’s Guide to India:

“Indian consumers aren’t bargain hunters. They process value in a unique and sophisticated way. It’s not the cheapest option that wins; it’s the one offering the best perceived value.”

‍

This nuanced understanding of value extends beyond price—it encompasses the benefits, importance, and even the long-term cost of using the product compared to alternatives.

However, it’s worth noting that trust is fragile. Even after it’s been established, a single bad customer experience can drive away over 53% of consumers, who often view a failure to uphold the brand promise as a deep betrayal. While this might sound discouraging, it’s also a golden opportunity for new-age D2C brands to swoop in and win over new customers. 

By consistently delivering exceptional experiences, they can not only retain loyal customers but also use this market vulnerability to challenge and even surpass legacy players.

Extreme honesty as a competitive lever in building trust

Shashank Mehta, founder of The Whole Truth, exemplifies this understanding. This homegrown D2C brand has disrupted the “Food” category, competing with industry giants by focusing on trust as its foundation.

How? By delivering a repeat order rate of 57%, compared to the category average of 35%. 

In a podcast with Blume Ventures, Shashank attributed his brand’s success to the immense trust the brand has built with its consumers. This trust has been intentionally cultivated through initiatives like:

• Transparency in packaging: Listing all ingredients on the front of the pack.
• Collaborations with industry watchdogs: Partnering with figures like Foodpharmer (of #LabelPadhegaIndia fame).
• R&D commitment to values: Delaying product launches by 15 months to maintain a 100% clean label—refusing to settle for 99.9%.

The Bottom Line

The assumption that Indian consumers lack trust is a self-defeating myth. Indian shoppers are discerning, value-driven, and remarkably loyal when brands earn their trust.

For D2C brands, this means the path to profitability doesn’t lie in constant discounting or heavy ad spend alone—it lies in building trust, by any means necessary. It’s the only lever that is equally effective in attracting net new customers and in retaining existing customers.

If they’re open to placing their trust in brands, the real question is: are you giving them a reason to?

‍