Be it the five-year-old luggage brand Mokobara, young fashion brand Snitch or older incumbents like Sugar Cosmetics and Boat, these companies have managed to cater to the tastes of the fashion-forward Gen Z and millennials while also localising their assortment to suit desi nuances.
“The big brands which existed were averaging people’s requirements. Consumers are demanding more, they want more than average and are willing to pay a premium for that. There is now a fairly large chunk of people who have a reasonable amount of discretionary income,” V S Kannan Sitaram, co-founder and partner at Fireside ventures, told TOI.
The VC fund, for instance, recently invested in Gurgaon-based Moxie Beauty which makes haircare products for Indian hair type, habits and weather – a proposition which global brands hardly offer.
Several new-age brands like Mokobara, Sid’s Farm, Foxtale, Bummer, and ICON have raised funding from investors this year. Last month, Accel led a $9 million funding in luggage brand Uppercase. New-age direct-to-consumer brands have already pocketed over $400 million from investors so far in 2024, data sourced from market research firm Tracxn showed. Since 2014, the segment has collectively bagged more than $5 billion in funding, the data showed.
Analysts at Bain & Company describe these brands as “insurgent”, with higher adoption among Gen Zs who prefer buying from digital-first brands. “The increase in India’s income and consumption has led to the rise of insurgent brands – young, new brands that cater to the underserved needs of the emerging affluent consumer class. These brands are already growing faster than their respective categories – by approximately three times,” said Hariharan Premkumar, managing director and head of India at DSG Consumer Partners, which has funded new-age companies like Farmley, Go Desi and SuperBottoms. Such brands are trying to create new categories for Indian consumers who are increasingly seeking more solutions as well as products which can cater to different needs and occasions.
With consumers demanding more, there is also an opportunity for them to premiumise. “The premium segment is underserved and offers a good beachhead for insurgent brands to build from there,” said Premkumar. In fact, estimates suggest that premiumisation and new category creation will account for about 50% of overall consumption growth by 2030, providing ample scope for new-age brands to capitalise on.
With the emergence of quick commerce platforms, brands can also reach consumers faster, said Maanav Sagar, partner at Bharat Founders Fund.
