Memos

Memos

Investing in Comet

Sneakers crafted for aspirational modern India

Published
20th May 2024
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5 mins

"My mama always said you can tell a lot about a person by their shoes, where they going, where they been."

- Forrest Gump

This iconic quote from Forrest Gump resonates deeply in an era where sneakers have transcended their utilitarian roots to become powerful symbols of identity, self-expression, and social currency.

Take Farah (name changed), for example. With a sheepish giggle, she admitted to us, "I'm not sure if I should be proud of this, but I probably have 20 pairs of sneakers now."

This was the highlight of one of the first conversations we were having to understand consumer purchase behavior in the footwear category. And quite frankly, we were a little astonished. But as we spoke to multiple consumers across Millennial and Gen-Z cohorts, Farah's purchase pattern started to feel like the new normal.. As topwear and bottom-wear fashion become more minimalistic over time, young consumers are finding their "sole" in expressing and signaling status through fashionable footwear. The brand and design have to be apt for the different occasions in their lives, and of course comfort needs to be a given.

Globally, this passion has led to a historical rivalry between Nike, Adidas and other sneaker brands, and driven continuous product and marketing innovation. Fans of sneaker companies have passionately argued for the superiority of their preferred brand on social media, creating sub-cultures of intense loyalty and tribalism. Collectors of sneakers have emerged, and as a consequence companies such as Goat and StockX which are second-hand sneaker marketplaces have become multi-billion dollar businesses.

The growing popularity of sneaker culture in India is also beginning to reflect this shift. Instagram pages meticulously track and post details about which sneakers celebrities are wearing. Videos showcasing sneaker collections have become a genre in itself, garnering millions of views on YouTube. Sneaker conventions bring together thousands of passionate sneakerheads and feature an enviable lineup of artists.

However, the aspirational consumer in India remains underserved.

Globally, brands such as Nike and Adidas that got built on top of sports-related marketing and solved for use-cases such as “running shoes” have also created lifestyle footwear to cater to this consumer need. But, not many own a Nike / Adidas or a running shoe for that matter in India today. Also, while there is a global brand halo, Nike and Adidas haven’t really innovated much in terms of marketing to bring lifestyle footwear and sneakers to India. It wouldn’t be a surprise if more people in India relate to Jordans the shoe now (given the buzz around sneakers) v/s Michael Jordan himself (given he hasn’t played the sport since the time today’s 21-year-old was born + limited appeal of basketball in India).

At the same time, affordable domestic brands offer little in terms of differentiation and aspirational value, while global brands such as Nike and Adidas are often beyond budget. While Nike and Adidas are affordable globally, at the $100 price point, the same price point is beyond reach for most Indian consumers today.

Enter Comet.

Comet is strategically addressing this dichotomy through a curated collection of uniquely designed sneakers and slides, loved by customers for their distinctiveness, relatability, and quality. It is trying to cater to the unmet needs of the aspirational, young Indian who thinks about footwear holistically, beyond its functional aspects. Comet’s marketing and communication are lifestyle based, which we believe is a completely untapped white space, and arguably the only logical way to create a large brand that appeals to the aspirations of middle-class India.

Our conversations with the founders, Utkarsh and Dishant, revealed their deep customer obsession, nuanced understanding of the market dynamics, and long-term vision of building a new-age Indian-origin lifestyle brand.

Their meticulous approach, combined with great storytelling prowess and first-hand experience of being a part of their target demographic, has been pivotal in crafting products and campaigns that resonate with their TG.

Utkarsh's passion for sneakers runs deep. The Kellogg Business School alumnus often jokes he was in the US doing an “MBA in Sneakers” - studying the ins and outs of the sneaker industry, from marketing strategies to consumer behavior.

Utkarsh Gupta (Left), Dishant Daryani (Right)

Comet's pricing is 40-50% lower than international brands like Nike/Adidas, making them affordable. At the same time, they have been able to create aspiration through a thoughtful marketing approach encompassing ‘drops’ (limited collections), ‘relatable product names such as “Mango” (India’s most loved fruit), “Jugnu” (Hindi word for fireflies sparking nostalgia) etc., a policy of honest pricing and no discounting, and heavy emphasis on product based marketing v/s being celebrity led, etc. Their recent drop in collaboration with artist Santanu Hazarika sold out within 2 hours, the first time a sneaker release by a homegrown brand has sold out at this speed in India.

Comet's focus on India-centric design and high-quality products at an attractive price point seems to have struck a chord with consumers, translating into a burgeoning, loyal community. This connection was palpable in all our customer conversations that ended with a High Net Promoter Score (NPS) of 75+, rivaling the best new-age brands in India.

Comet’s engagement on platforms like Instagram further exemplifies the deep relationship Comet has established with its audience. The user love we have seen with Comet has been phenomenal. Comet's Instagram posts are inundated with comments from enthusiastic fans, eagerly inquiring about the next drop and pleading for restocks of their favorite designs.

The Indian footwear market is anticipated to grow at a CAGR of 9-10% over the next 5-6 years. This growth is being driven by both a higher number of pieces being purchased by each customer, and also premiumization of the category. Premiumisation is also evident in companies such as Metro Shoes, where the revenue from its premium portfolio (>INR 3,000) has gone up from ~500 Cr in 2022 to ~1100 Cr in the current fiscal growing at ~50% CAGR

We believe that the Indian footwear industry is on the cusp of a significant transformation, driven by a general trend of consumer lifestyle choices reflecting personal identity and aspirations through self-expression, beyond functionality. And while this started out with more affluent Indians, aspirational Indians are following suit.

As Comet sets new standards in consumer engagement and product innovation, we are excited to partner with them on their journey toward building one of India's most-loved lifestyle brands. Good shoes take you to good places and we cannot wait to see Utkarsh, Dishant, and Comet go places.

It's only fitting that we end with another quote from Forrest Gump: "I've worn lots of shoes. I bet if I think about it real hard, I could remember my first pair of shoes." We believe that for many young Indians, Comet will be that unforgettable first pair that sparks their love affair with sneakers and self-expression.

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