12 Consumer Trends/Observations in India in 2024

Here is a list of 12 observations/trends which could be relevant for founders building in consumer brands/tech in 2024

Slightly long read, and comes primarily from 1000s of consumer interactions and observations at retail counters & home visits over the years across all parts of the country

a) India is a poor country( very low GDP/capita) with a significant number of people with high disposable income ( ~ 30 Mn Households with annual household income greater than 10 Lakhs).

But the challenge for brands is that there is absolutely no homogeneity in the rich of the country. They are spread across the length and breadth of the country. And they differ widely in their choices.

Other than their wealth, it will be very difficult to find common pointers between a 40 year old successful tech professional in Bangalore and a 40 year old second generation real estate developer in Guwahati. Makes it very difficult for premium brands to scale both from a distribution as well as product/brand positioning point of view

b) Premiumization is a huge trend in most categories. The reason being increase in disposable income in top 10% of households and easy access to lending/EMIs. Also, debt to buy durables/cars/phones is no longer a taboo.

The result is that whether it is fans or cars or 2 wheelers, the growth of the premium segment is way higher than the growth of the entry segment, driving up the average selling price of the category

c) The Indian consumer( or any consumer with some disposable income) is not price conscious, but value conscious. Show them the value, and they will shell out a premium. But creating, communicating, and delivering value consistently is what makes people pay a premium for brands.

The absolute difference in cost and total cost of ownership is increasingly considered by consumers while making expensive purchases. While someone buying a WagonR will not upgrade to a Mercedes( the absolute amount gap is way too high), people considering a 70k Petrol 2 wheeler will easily upgrade to an EV 2 wheeler keeping the total cost of ownership in mind. Same for consumers moving from 2000 Rs induction fans to 3500 Rs BLDC fans.

d) Design has become one of the most important reasons for purchase, even for purely functional categories. Never in my wildest dreams, I would have imagined the primary reason for buying a feature loaded mixer grinder was the compact form factor and sleek design.

Gone are the days when brands with outdated designs could win. From bags to gas stoves to apps to luggage, meaningfully differentiated designs are here to stay and win. Zouk and Mokobara are great examples of this phenomena.

e) India has traditionally been a trust deficient society. And that is the reason you see the same conglomerate selling everything from salt to cars to jewelry.

But today there is a very large digitally native e-commerce shopper base who are ready to try out new brands and products. For them, shopping to stay trendy is real. Functional benefits and offers mean more than brand legacy.

For brands to win with this segment, being exciting is more important than being trustworthy. They are also ready to trust new brands/products basis word of mouth, Amazon reviews, Influencer posts etc.

f) In a market like India, good supply at right price points will always unlock demand. TAM can expand exponentially with the right supply.

Before Lenskart, no one thought the market for eye glasses could be this big. Before Mahindra bet big with Scorpio, no one thought the market for SUVs could be this big. And we are seeing the same trend play out in many categories.

g) Digitally influenced sales in every category is growing at breakneck speed. Consumers are evaluating and seeking more and more information before making a purchase.

This evaluation often starts online. And it isn’t just Google and Youtube. More and more searches are beginning and ending on Amazon and Flipkart during the evaluation phase. It is no wonder that both have become advertising monsters.

The number of people who discover and even switch existing preferences during this evaluation phase is increasing exponentially. Brands that dominate the evaluation phase will emerge as huge winners. Reviews on Amazon, Reviews on PlayStore and Reviews on Youtube

h) There is a huge embrace for sports, health and wellness. But there are intricacies.

People want to eat healthy, but without compromising on taste. People want toxin free cosmetics, but not at the cost of glowing skin. People want their kids to play more and even consider a career a sports, but still want good grades as a back up. People want to go the gym, but don’t want to do the same old lifts and crave for a more community experience.

Brands who solve for these intricacies at right price points will become huge

i) Q-commerce is here to stay. But I think they are a much bigger threat to e-commerce and semi-organized/organized offline retail. Not to Kiranas. Because of their very low cost of operations and adoption to India tech stack( whatsapp chats for orders, UPI for payments), Kiranas will survive.

j) Emergence of Q-Com will also lead to emergence of new brands. In the 2000s with Modern Trade and 2010s with E-Com, we have already seen that whenever there is a new distribution channel, it leads to emergence of new brands who piggyback on that channel. I think that there will be many F&B brands who will piggyback on Q-com to reach sizeable scale

k) There are no online or offline consumers, but only omnichannel consumers. In fact in every category where price discovery is possible( CPG, electronics, durables etc), consumers today come to stores with the amazon listing open and try to negotiate a price lower than what it is selling online.

And vice versa. Where people come, select a product and before making a purchase they check the price online and if found cheaper, walk out. Evaluate online, buy offline. Evaluate offline, buy online. Both are happening at scale.

And that is why brands skewed towards only a single channel will struggle to scale. Also with reducing information asymmetry, the power has moved from the retailer to the consumer. Brands have no choice other than maintaining the same price across channels

l) Media is fragmented like never before. I don’t think there are any avenues left to build high reach and brand salience quickly and efficiently amongst the top 10% households.

The reason is 2 fold- glut of content and changing device preference. 20 years back, certain number of spots on impact properties like KBC or India cricket would have ensured very high reach. Not any more.

Because you have infinite content on OTTs and Youtube and Reels and people( at least those who have buying power) have limited time, actual relevant reach of individual content has gone down.

The other phenomena is emergence of Connected smart TVs. India already has 40-50 million CTVs on a lower side. Affordable connected TVs and affordable WiFi by Jio has meant the top 10% population in metroes have already moved( or are moving) totally away from linear TV.

But linear TV still rules the roost in tier 2 and tier 3 because WiFI infra and costs in tier 2/3 isn’t the same as metroes. So, again viewership gets divided by devices. And being present on Star Sports alone or Hotstar/Jio Cinema alone won’t let you get desired reach, even on marquee properties like IPL and World Cup. So, the costs of building brand salience has gone up.

It has never been easier to start consumer brands. Q-Com, E-Com, performance marketing and clear playbooks of scale makes it easy to launch and reach a certain scale.

But building large enduring profitable brands will still remain very difficult with so many brands, fragmented media and requirement of omnichannel distribution