Be it the five-year-old luggage brand Mocobara, young fashion brand Snitch or older companies like Sugar Cosmetics and Boat, these companies have managed to cater to the preferences of the fashion-conscious Generation Z and millennials while also localising their products to suit desi nuances.
“In the current times, the big brands were catering to the needs of the masses. Consumers are now more demanding, they want more than the average and are willing to pay a premium for it. There is now a larger segment of people who have a fair amount of discretionary income,” VS Kannan Sitaram, co-founder and partner, Fireside Ventures, told the Times of India.
For instance, VC Fund recently invested in Gurgaon-based Moxie Beauty, which makes haircare products for Indian hair types, habits and climate — a proposition that global brands rarely offer.
Several new-age brands such as Mocobara, Sids Farm, Foxtel, Bummer and Ikon have raised funding from investors this year. Last month, Accel led a $9 million funding round in luggage brand Uppercase. Data sourced from market research firm Tracxn showed that new-age direct-to-consumer brands have raised over $400 million from investors so far in 2024. Data showed that since 2014, the segment has collectively secured over $5 billion in funding.
Analysts at Bain & Company describe these brands as “radical,” and their usage is high. Generation Z who prefer to shop from digital-first brands. “India's rising incomes and consumption have led to the rise of young, new brands – rebel brands – that cater to the underserved needs of the emerging affluent consumer segment. These brands are already growing almost three times faster than their respective categories,” said Hariharan Premkumar, managing director and India head of DSG Consumer Partners, which has funded new-age companies such as Farmly, Go Desi and Superbottoms. Such brands are trying to create new categories for Indian consumers who are increasingly looking for more solutions as well as products that can meet different needs and occasions.
As consumer demand grows, there is also an opportunity for them to premiumise. “The premium segment is still very underserved and this presents a great opportunity for new brands to grow from here,” Premkumar said. In fact, estimates suggest that premiumisation and new category creation will account for nearly 50% of total consumption growth by 2030, giving new-age brands ample opportunity to capitalise on this.
Manav Sagar, partner, Bharat Founders Fund, said that with the emergence of instant commerce platforms, brands can also reach consumers faster.