How the Story of New Age Consumers is shaping up?

As per the data, over last few years 17 billion dollar business has been shifted from big brands to small product start-ups.
grocery start-up

Fireside is consumer product focused fund which was incepted in 2017. In this short spell of time; the company has build up the portfolio of eighteen companies including FMCG and non FMCG companies. The company's vision is to build 25 iconic brands over next two years. VS Kannan Sitaram, Venture Partner, Fireside Ventures was addressing the start-up entrepreneurs at recently concluded Indian retail and eretail congress (IReC) 2019 in the capital city New Delhi.

Excerpts of the speech..

Market Evolution

The world of consumer brands has been changing quite significantly in last many years. In fact, consumer product is an area where a lot of disruption is happening; mainly driving by millennials and who are creating new trends in this space. This segment has started to attract the interest of wide variety of investors. Brands which were significantly small few years back are now chipping away the market shares of big brands. As per the data, over last few years 17 billion dollar business has been shifted from big brands to these small product start-ups.

 Today, all big companies are either acquiring these brands or investing directly in these product start-ups. Few of them also have started their own venture capital arms to take stake in these early stage companies because they want stay to near the ground.

Consumer Segmentation

Over the years, there has been drastic revision in the per capita income in India. Today, per capita income in Indian household has crossed 2000 dollars; we see it as significant development. This is the situation where people start seeing the emergence of very significant aggregate trends in the economy. Therefore, we are looking at changing population in India which is very aspirational.

In terms of consumer segmentation, we used to talk about Indian Pyramid where large mass of poor people used to place the bottom of the pyramid. Today if you look at population dynamics, it is very different; the shape is no longer a pyramid. As per the Bain capital report, by 2030, the shape of population dispersion will be very different. It is increasingly becoming Top- Heavy. Consumers have different set of demands.

Theory of Brand 2.0

This is the first time the consumer is reading at the back of the pack. Today, consumers are keen to know about the key ingredients of the products. They are keen for features such as green label, preservative free, chemical free and all sorts of other attributes which makes the product healthy. New age brands which we can call Brand 2.0 cater all above parameters, and they are building faster and they are getting build with less capital.

Earlier, it used to take years to figure out which products actually work. Today the promoters of company are just going online, putting the products online and seeing which among them is getting the traction and come to know which product is going to win in the market.

No product start-up is straightway going to offline because this channel consumes many resources. Hence, they are going marketplaces such as Amazon, Flipkart and specialized verticals like Nykaa, Firstcry amongst others then they are going offline. Overall mechanism of scaling brands is very different now as compared to as it used to earlier.


 

 

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