What explains the great Indian brand rush?

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While working with US supermarket chain Safeway late in the first decade of this century, a young Prashant Parameswaran witnessed Peruvian ‘Quinoa’ exploding in popularity to achieve superfood status in the country.


Taking cue from this trend, Parameswaran asked himself if there was a way to make ancient millets like ragi, jowar and bajra relevant and popular in India again. Thus was born millet-based breakfast cereal and snack brand Soulfull, which Parameswaran started in 2011 upon returning to India.




Before being acquired by Tata Consumer Products in 2021, Soulfull had placed itself as a niche brand with a strong focus on reinventing millets in a modern format. With a turnover of 39 crore rupees in FY20, Soulfull was reaching over 12,000 outlets by establishing a strong presence in select urban markets.


Soulfull is among the several small brands with unique product propositions that have become targets for established .


These are largely digital-first D2C that bypass the conventional method of multi-tier distribution structure, enabling faster go-to-market speed and greater control over customer data and experience.


Over the past five years, legacy players have made a slew of investments in D2C startups.


Marico has acquired men’s grooming brand Beardo, beauty brand Just Herbs and breakfast brand True Elements.


Similarly, Emami acquired vegan cosmetics brand Brillare Science and grooming brand The Man Company. It recently picked up a minority stake in nutrition company TruNativ.


Colgate-Palmolive and Reckitt both hold minority stakes in Bombay Shaving Company, whereas Wipro Consumer Care has invested in The Ayurveda Company.


ITC has invested in baby and mother care brands Mother Sparsh and Mylo.


[Byte of Devangshu Dutta, CEO, Third Eyesight]


New brands struggle to find shelf-space in modern trade and traditional retail channels. For them the growth of digital customers has enabled targeting specific customer segments and needs which are ignored by the established as being too small. Once they achieve a certain visibility and scale they become interesting to the larger companies, since rolling out the brands over the larger, physical footprint becomes more feasible.


Incumbent players are either acquiring prominent D2C brands or choosing the organic route of launching their own brands online and building their own D2C platforms to reduce their reliance on marketplaces.


Marico is working on a ‘house of brands’ strategy by creating a portfolio of D2C companies through a mix of organic and inorganic routes. Meanwhile, Dabur estimates that its online-only D2C brands will cross 100 crore rupees in sales this fiscal. ITC currently sells over 700 products through its D2C store platform.


D2C brands are estimated to become a $60 billion industry by FY27, growing at a CAGR of about 40%. At present D2C is a $12 billion market (above image).


Institutional funding is helping D2C brands scale rapidly, with several of them crossing the 100-crore-rupee revenue mark within 3-5 years of launch. But what does this say about the ability of legacy to innovate?


[Byte of Devangshu Dutta, CEO, Third Eyesight]


Analysts say the strong background of founders of D2C companies, who are well-educated and armed with work experience in reputed firms, is an important factor in the success of such brands.


The boom of D2C brands was supported by the development of logistic partners and the adoption of online payments. Improving digital penetration and high growth in e-commerce will help going ahead.


D2C brands in the Beauty and Personal Care (BPC) and Food & Refreshments (F&R) space focus on niche ingredients and products, targeted at sub-categories ignored by established brands. Attractive packaging and strong digital marketing capabilities are key tailwinds for D2C brands.


Such startups wanting to scale beyond a point will see their interests align with mainstream companies looking to enter new segments. All of this would mean that more and more D2C brands will present themselves as potential opportunities for top traditional companies.

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