The Macro, Micro, and Enablers All Align For Brands Catering to Aspirational India

2024 was a pivotal year for India's consumer landscape, marked by strategic shifts in target segments, distribution models, and growth approaches. Several trends are reshaping how successful consumer brands are built in India.

The most notable development is the success of brands catering to the aspirational consumer. While conventional wisdom attributes this to rising disposable incomes or increasing income inequality, the reality is more nuanced. These macro drivers have been in play for years, but the true manifestation happens when the right factors, such as channel, supply, and capital, align as they have in 2024.

Indian consumers across income groups are demonstrating the willingness to spend more for access to high-quality products and services in beauty, home, lifestyle, food, and more (termed premiumisation), driven by three key shifts:

• The shift to visual-first & short-duration content on social media has improved product discovery and awareness with targeted offerings.
• Organized supply chains (global and increasingly local) have made high-quality products consistently accessible to all corners of India.
• The growth of e-commerce and quick commerce platforms has made it viable to serve specialized consumer cohorts (think: men worried about hair loss OR couples in early stages of family planning) with targeted offerings.

Many products and offerings being created now were difficult to distribute earlier, even if they resonated strongly with Indian consumers. Today, with these enablers, Indian consumers, who’ve always been value-conscious rather than price-conscious, are lapping them up.

Another consequence of the above tailwinds is shortened feedback cycles, which founders leverage to validate their propositions and grow faster. This has helped attract more capital, accelerating the sector’s growth.

Moreover, successful IPOs strengthen this momentum, helping investors visualize the path for these businesses to go public, and how these businesses can evolve into enduring institutions.

A New Channel Emerges

Quick commerce has emerged as a powerful enabler for new-age brands serving the discerning consumer. It has unlocked access to customers for many categories, particularly new-age FMCG, which previously faced challenges penetrating offline channels without the distribution might of incumbents.

Quick commerce has not only captured market share from existing channels, but also expanded the overall market size. This is classic consumerism, where improved accessibility drives increased consumption. We’ve seen this play out with our portfolio companies like Swiggy and Urban Company, where seemingly small TAMs expanded as these market creators solved for customer pain points and unlocked newer use cases.

With this new channel gaining prominence and expanding customer wallets, many early mover brands have captured consumers' minds and wallet share. Founders need to be agile and leverage the channel to figure out consumer insights/pain points as the market grows.

In markets like China, we’ve seen how the emergence of a new channel can lead to new brand creation. Closer to home, the growth of Amazon/Flipkart/Nykaa/Swiggy and rising internet penetration have led to many new D2C brands. The combination of quick commerce’s increasing reach and the rising disposable incomes of the target demographic presents a secular trend that augurs well for founders looking to build a consumer brand in India.

The Ecosystem Continues To Mature

2024 also saw the ecosystem maturing, with more brands achieving profitability at scale and, therefore, the start of successful public listings.

The sector's appeal to public market investors is clear – these business models are easily understood, and the broader India consumption story resonates strongly. This has created a virtuous cycle, making consumer brands increasingly attractive to private market investors as well.

The successful IPOs of omnichannel brands FirstCry (from our portfolio) and Honasa Consumer this year underscore this trend. We expect more brands to go public in the coming years and create value for all stakeholders.

Looking ahead, while India's consumer brands landscape remains dynamic with low entry barriers, the barriers to scale are very real. Success will require founders to excel on multiple fronts: identifying and capturing new PMF opportunities and continuing product and supply chain innovation to build a differentiated customer value proposition.

As categories become increasingly crowded with new-age brands competing for fragmented market share, founders need to think beyond the initial ₹100 crore milestone. Building truly large outcomes will require either developing capabilities to capture disproportionate market share within categories or identifying and riding secular penetration stories in underpenetrated sectors.

India's changing consumption story is particularly exciting for premium discretionary categories. By 2030, we expect brands catering to consumers' discretionary needs — across home, footwear, durables, QSR, toys, and more — to form a sizable part of the listed universe. Our analysis suggests 25-30 breakout companies could contribute a combined public market cap of ~$50B by 2030.

At Elevation, we are committed to identifying and partnering with founders who demonstrate the vision, execution capabilities, and customer obsession needed to build tomorrow’s category-defining brands.

New Partnerships and Growing Relationships

We partnered with Comet by leading their Series A round. Comet is building a lifestyle brand catering to the unmet aspirations and needs of young Indians who think about footwear beyond its functional aspects. Read our investment memo here and watch our Day One podcast with founders Utkarsh Gupta and Dishant Daryani here.

We also welcomed Wakefit to the Elevation family as they continue their remarkable journey from an online mattress brand to a comprehensive home and sleep solutions company. In our Day One podcast, founders Ankit Garg and Chaitanya Ramalingegowda shared how their customer-obsessed approach and full-stack model have enabled them to scale beyond ₹1,000 crore in revenue.

We continued to support our existing portfolio companies and deepened our partnership with The Souled Store and Mosaic Wellness this year as they scale their businesses.

Shaping India's Consumer Brands Narrative

Throughout the year, we contributed to the discourse around building consumer brands in India through research, events, and knowledge-sharing initiatives.

We kicked off the year with our "What If... We Win?" series - a data-backed exploration challenging prevailing pessimism about consumer opportunities in India. Through detailed analysis and case studies, we identified massive whitespaces across different segments that ambitious founders could target.

As part of this series, our deep dive into the $50B consumer brands opportunity revealed how, despite an $800B+ retail market, India remains brand-starved. However, several enablers have now converged to make D2C brand-building both lucrative and exciting. Through examples from our portfolio including SUGAR Cosmetics, Bliss Club, Country Delight, and The Souled Store, we demonstrated how new-age consumer brands can achieve ₹100 Cr+ scale online and eventually get to ₹1000 Cr.

We also explored offline-dominant approaches that are critical to building scale in certain categories. While the most popular playbook for new-age founders has been digital-first, we're seeing this convention evolve. With 65% of offline consumer purchases now being digitally influenced, new-age brands have an inherent advantage in offline channels as well.

We hosted several impactful events this year, including our consumer brands portfolio founder mixer in Bangalore, which brought together all our portfolio founders for deep discussions on topics like CAC, EBO strategy, and organizational culture. The mixer's intimate format facilitated unfiltered conversations and peer learning.

In collaboration with ACLR8, we hosted an exclusive D2C Mixer at our Gurugram office, bringing together over 40 early-stage founders for an evening of learning and networking. The event featured Nitin Saluja (Co-founder, Chaayos) discussing brand building and customer experience and Bharat Kalia (Co-founder, Lifelong Online) sharing insights on marketplace strategy and scaling. We also launched our "(Out of) Office Hours" initiative, providing a safe space for operators considering entrepreneurship to brainstorm ideas with our team. The overwhelming response led to multiple editions throughout the year.

Our SummitUp podcast episode on building QSR brands featured an in-depth discussion on what it takes to build a large, profitable QSR chain in India. Chirag Chadha and Vaibhav Chowdhury explored everything from optimizing store economics to building strong moats.

Portfolio Highlights

Bliss Club was named 'Breakout Brand of the Year' at the 20th edition of CNBC-TV18's India Business Leader Awards (IBLA). This recognition validates founder Minu Margeret's vision of creating incredibly technical movewear that champions comfort and confidence for Indian women, a mission that has resonated strongly with consumers.

Looking Ahead to 2025

As we enter 2025, we remain more excited than ever about the potential for building enduring consumer brands from India.

As new mission driven founders continue to reshape India's consumer landscape, we see tremendous opportunity for building brands that resonate with an increasingly discerning consumer base.

Here's to another year of building iconic brands!