The market for Internet First Brands (IFB) is rapidly evolving in India with several brands across categories developing on the back of online marketplaces.
Customer desire to try new brands coupled with company willingness to experiment with niche ingredients and materials is propelling the growth of 'Internet first' consumer companies, highlights a report by Praxis Global Alliance and Brands Decoded.
The report noted that incumbent brands are losing share to IFBs and are fighting back by establishing a deeper online presence and leveraging deeper distribution capabilities.
"Eventual shift from brand to product loyalty can reduce customer lifetime value and increase churn; high capital and customer acquisition costs limit offline advertising and expansion," it said.
While incumbent brands typically take 9-12 months to launch new products, IFBs have been successful in launching products quickly, in 3-4 months at the back of their deep understanding of online customers, it noted.