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ASCI flags unsubstantiated claims as a growing risk for India’s D2C brands
Our read
India D2C valuations will increasingly discount unsupported growth claims as advertising compliance becomes a board-level diligence metric.
For operators
Build claim substantiation and ASCI compliance into campaign approvals to prevent marketing-led regulatory and consumer-trust risks.
Watch
Increase in ASCI complaint volumes or upheld decisions involving D2C, influencer-led or digital-only brands.
Ask next
The report,
ASCI’s secretary general warns that Indian D2C brands often use unsubstantiated advertising claims, creating consumer-law, regulatory and governance risks. The article urges founders and investors to vet marketing claims as rigorously as financial, legal and data-security diligence.
Reported figures
From the report. Source details below
- 18 months
Why it matters to operators
In M&A evaluations, review the target’s advertising claims, substantiation records and complaint history as potential sources of contingent liability.
What to watch next
- Consumer-protection authority actions, fines, takedown orders or marketplace delistings tied to misleading advertisements.
- Investor term sheets, acquisition checklists or insurer questionnaires explicitly requesting advertising-claim substantiation.
- Rising use of lab tests, clinical studies, certifications and third-party verification in D2C campaigns.
- Marketplace and social-platform policy updates requiring evidence for health, sustainability, pricing or endorsement claims.
- Competitor complaints targeting category-leading claims in beauty, nutraceuticals, food, personal care and household products.
Likely next moves
Our read of what comes next — analysis, not reported by the source.
- Create a central claims register linking every live marketing assertion to evidence, approval owner, geographic applicability and renewal date.
- Add advertising-compliance review to board, investor and M&A diligence packs, including historical complaints, ASCI decisions, refunds, influencer contracts and substantiation files.
- Prioritise audits of health, wellness, beauty, nutrition, environmental, price-comparison, 'best' and 'clinically proven' claims.
- Require pre-clearance for creator content, customer testimonials, before-and-after imagery, endorsements and limited-time discount messaging.
- Build product, legal, marketing and customer-service escalation processes so challenged claims can be paused and corrected quickly.
The counter-case
The case against this reading — not reported by the source.
The signal may overstate the immediacy of the risk: ASCI is a self-regulatory body, and many claim disputes result in ad modification or withdrawal rather than material financial penalties, business interruption or governance failures. For most D2C brands, weak unit economics, high customer-acquisition costs, returns, fulfillment failures and cash burn are likely to remain more consequential diligence issues than advertising substantiation.
The source
Published
First seen