Bengaluru, Aug. 12 -- Brands that directly sell to consumers have realized that usual festive preparations won't be enough to lift them out of a demand slump this year.

Ahead of the period considered auspicious for buying everything from appliances and cars to jewellery, such small and medium-sized businesses are front-loading investments in inventory and spending more on promotions than in the previous festival seasons. Much of this is aimed at stocking up for quick-commerce, one channel that has so far been immune to subdued consumption.

Many brands are seeking as much as 40% more working capital this year compared to the previous year, according to Atul Khichariya, co-founder of Velocity, a platform which helps businesses sell online...