Insights - Brand & Marketing - Marketing for Founders

12 Key Consumer Trends in India

Arindam Paul, CBO of Atomberg, shares twelve essential trends for founders building consumer brands in India.

young indian man folded arms in front of texture with colours of indian flag
MORE FROM ARINDAM

Marketing Metrics for Founders

  • Turnover< Rs.20cr
  • Turnover between Rs.20cr and Rs.100cr
  • Turnover> Rs.100cr
  • Arindam Paul, Chief Business Officer, Atomberg, is known for sharp, insightful views on brand-building. Based on thousands of consumer interactions and observations at retail counters and home visits across the country, he’s put together a list of twelve key trends for founders building consumer brands in India.


    You can subscribe to Arindam’s newsletter here or follow him here.


    1. Lack of Homogeneity

    While India has a low GDP per capita, there are a significant number of people with high disposable income (~ 30 Mn Households with annual household income greater than Rs. 10 Lakhs).

    The challenge for brands is that there is absolutely no homogeneity amongst wealthy Indians. They are spread across the length and breadth of the country and they differ widely in their choices. Other than their wealth, it will prove difficult to find too much common ground between a 40 year old successful tech professional in Bangalore, and a 40 year old, second generation, real estate developer in Guwahati.

    This makes scaling a challenge for premium brands – both from a distribution as well as product/brand positioning point of view.

    2. Premiumisation Across Categories

    Several factors are contributing to the strong premiumisation trend, including higher disposable income and easy access to lending/EMIs. Debt to buy durables/cars/phones is no longer taboo.

    The result is that whether it is fans,cars or two-wheelers, the growth of the premium segment is way higher than the growth of the entry-level segment, driving up the average selling price of the category.

    3. More Value-Conscious, than Price-Conscious

    The Indian consumer is not price-conscious, but value-conscious. Show them the value, and they will shell out a premium.

    The absolute difference in cost and total cost of ownership is increasingly considered by consumers while making expensive purchases.

    Someone buying a WagonR will not upgrade to a Mercedes, because the absolute amount gap is too high. However, people willing to pay Rs. 70,000 for a petrol, two-wheeler, will upgrade to an electric two-wheeler keeping the total cost of ownership in mind. The same applies for consumers moving from induction fans at Rs. 2000, to BLDC (Brushless Direct Current) fans at Rs. 3500.

    Creating, communicating, and delivering value consistently, is what makes people pay a premium for brands.

    4. Design is a Purchase Driver

    Design has become one of the most important reasons for purchase, even for purely functional categories. Now the primary reason for buying a feature-loaded mixer grinder could well be its compact form factor and sleek design.

    Gone are the days when brands with outdated designs could win. From bags to gas stoves to apps and luggage, meaningfully differentiated design is here to stay and win. Zouk and Mokobara are great examples of this phenomena.

    5. From Trust-Deficit to Willing-to-Try

    India has traditionally been a trust deficient society – this is the reason that the same conglomerate can sell everything from salt to cars and jewellery.

    Today, however, there is a large, digitally native, E-commerce shopper base that is ready to try out new brands and products. For them, shopping to stay on-trend is critical and functional benefits and offers carry more weight than brand legacy. They are also ready to try new brands/products based on word-of-mouth, Amazon reviews, influencer posts, etc.

    For brands to win with this segment, being exciting is more important than being trustworthy.

    6. Good Supply x Right Price = Unlocked Demand

    Good supply at the right price point will always unlock demand. TAM (Total Addressable Market) can expand exponentially with the right supply.

    Before Lenskart, no one thought the market for eye glasses could be this big. Before Mahindra bet big with Scorpio, no one thought there was such a large market for SUVs . We are seeing the same trend play out in many categories.

    7. Digitally Influenced Sales Growing at Breakneck Speed

    Consumers are seeking more and more information when evaluating whether to make a purchase. This evaluation often starts online and goes beyond Google and YouTube.

    Increasingly, searches are beginning and ending on marketplaces like Amazon and Flipkart during the evaluation phase. (It is no wonder that both have become advertising monsters.) The number of people who discover, and even switch existing preferences during this evaluation phase, is rising exponentially.

    Brands that dominate the evaluation phase will emerge as huge winners. This requires a razor-sharp focus on reviews on Amazon, PlayStore, YouTube, etc.

    8. Rising Health & Wellness Trend has Nuances

    Indians are embracing sports, health and wellness – but you need to look beyond the surface.

    People want to eat healthy, but without compromising on taste. People want toxin-free cosmetics, but not at the cost of glowing skin. People want their kids to play more and even consider a career in sports, but still want good grades as backup. People want to go the gym, but don’t want to do the same old lifts and crave for a more community-led experience.

    Brands who solve for these intricacies at the right price points, will become huge.

    9. Q-commerce is Here to Stay

    Quick commerce is a big threat to E-commerce and semi-organised/organised offline retail, but not so much to Kiranas.

    Because of their low cost of operations and adoption of the India tech stack, (WhatsApp for orders, UPI for payments), Kiranas will survive.

    10. Q-commerce Will Lead to New Brands

    From modern trade in the 2000s to E-commerce in the 2010s – we have already seen that whenever there is a new distribution channel, it leads to the emergence of new brands who piggyback on that channel.

    There will be many F&B brands who will piggyback on Q-commerce to reach significant scale.

    11. No Online or Offline Consumers, Only Omnichannel Consumers

    In every category where price discovery is possible, (CPG, electronics, durables etc), consumers today come to stores with the Amazon listing open and try to negotiate a lower price compared to the online one. This also holds true for the reverse. People come, select a product and check the price online before making a purchase. They will walk out if they find a better deal online.

    Evaluate online, buy offline. Evaluate offline, buy online. Both are happening at scale. Brands skewed towards only a single channel will struggle to grow. With reducing information asymmetry, the power has moved from the retailer to the consumer. Brands have no choice, but to maintain the same price across channels

    12. Extreme Media Fragmentation

    There are no obvious avenues left to build high reach and brand salience quickly and efficiently amongst the top 10% households.

    The reason is a two-fold glut of content and changing device preferences.

    Twenty years ago, a certain number of spots on high-impact properties like Kaun Banega Crorepati or an exciting cricket match, would have ensured very high reach. Not any more.

    Now there is infinite content on OTTs, YouTube, Reels – the list goes on. The people with buying power, however, have limited time and attention. Not surprising that the actual relevant reach of content has plummeted.

    Another important phenomena is the emergence of Connected Smart TVs. India already has 40-50 million colour TVs. With affordable connected TVs and WiFi, the top 10% population in metros is fast moving away from linear TV. In Tier 2 and Tier 3 towns, linear TV still rules the roost, because WiFi infrastructure and costs remain a barrier. This means that viewership gets divided by devices. Being present on Star Sports or Hotstar/Jio Cinema alone, will not deliver desired reach, even on marquee properties like IPL and World Cup.

    In Conclusion

    It has never been easier to start consumer brands.

    Quick-commerce, E-commerce, performance marketing and tested playbooks, make it easy to launch and reach a certain scale.

    But the cost of building brand salience has gone up.

    Building large, enduring, profitable brands remains a challenge, with so many brands, fragmented media and the requirement of omnichannel distribution.


    You can subscribe to Arindam’s newsletter here or follow him here.

    2 Comments

    1. I think somewhere in our heads we know these trends but its super useful to see them listed so clearly and concisely. Thanks THC & Arindam

    Leave a Comment

    All comments are moderated according to our comment policy. Your email address will NOT be published. All fields are required.

    The Hard Copy is a resource for building and growing modern brands. Sign up to get case studies and advice in your inbox every week.

    Related Articles