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Deepak's Musings #146: India to become third largest consumer market by 2026

Deepak's Musings #146: India to become third largest consumer market by 2026

India retail is poised to be a $2.2Tn market by 2030; 90% of the market will still be delivered offline

Deepak Shahdadpuri
May 13, 2024

I am interested in all things consumer and insurgent brands. In my newsletter, I share what I read, think about, and reflect upon. You can follow me on Twitter at @dishahdadpuri or DSG Consumer Partners at @dsgcp.

We have two polls today, so we would love to engage readers to share their opinions.

p.s. You can click any summary link to read the full article from its source.

Luggage brand ICON

🧳 DSGCP partners with insurgent luggage brand ICON

An increase in consumer expenditure on lifestyle, growing per capita income, and a surge in business and leisure trips are a few of the many tailwinds driving this category. We first met Mohammad Patel and Poojan Shah when they started the nut butter brand MyFitness, which they built and exited profitability.

When the two and their co-founders, Fazal Lakhani and Aakash Mehta, set their target on India’s travel sector, we were excited to be part of their journey to build ICON.

I have switched from my Rimowa to the ICON Vintage.

Ditched my Rimowa for the all-new ICON Vintages. Mumbai Airport.

Luggage Brand ICON Bags Funding

D2C luggage and travel accessories startup ICON has announced $1.2 Mn in seed funding, led by DSG Consumer Partners, to expand its product line.

🍬 Portfolio spotlight: GoDESi closes new round of funding

I am super excited to have Aavishkaar Capital join us on the GoDESi cap table as we partner with Raksha & Vinay Kothari on their mission to build India’s leading confectionary brand.

If you have not tried GoDesi products, please order them ASAP on q-commerce and tell me what you think. My favourite is the Tangy Imli Popz.

Go DESi raises Rs 41 crore from Avishkaar and others

"There are immense opportunities in the packaged food industry in India, which is growing rapidly at 20-25 per cent. The funding partnership with Aavishkaar Capital will help Go DESi strengthen its product portfolio, accelerate marketing, rapidly scale our geographic focus and expand our distribution reach," Vinay Kothari, Founder of GoDESi, said.

🩲 Portfolio spotlight: XYXX launches their latest campaign, UndiePendence

Watch the reel and tell us what you think.

Poll 1: What do you think of XYXX's latest campaign

🏆 Do you buy the same brands as your parents?

Each generation tends to have distinct values, preferences, and behaviours that shape their identities. These differences can influence consumer habits and brand loyalty, creating opportunities for insurgent brands to emerge and cater to different generational cohorts' unique needs and desires.

Investments in "not my parents' brands" are #trending

Investors are shifting focus to Gen Z brands, moving away from traditional brands. This trend is visible in brands reflecting the changing consumer behaviour towards new and innovative products. The phenomenon of Gen Z consumers not using their parents' brands is visible in even sectors such as automotive and smartphones.

Poll 2: If you are under 40, do you mostly buy the same brands as your parents or do you tend to choose differently?

🇻🇳 Unlocking potential and promoting innovation in Vietnam's consumer sector

DSG Consumer Partners’ Sameer Mehta recently participated in a panel conversation at the Vietnam Innovation Forum to discuss unlocking potential and promoting innovation in Vietnam's consumer sector. Joined by Phuong Ha of METUB, Tung Nguyen of MindX Technology School and Anh Le of MASAN Group, the panel delved into Vietnam's transformative journey in the consumer sector, highlighting its vast potential amidst robust economic growth.

The Vietnam Consumer Opportunity

Sameer Mehta, Managing Director and Head of Southeast Asia, recently participated in a panel conversation at the Vietnam Innovation Forum on April 26.

💊 Effects of GLP-1 weight-loss drugs on the food industry

A new survey reveals that over 60% of medications like Ozempic and Wegovy users spend less money on eating out and ordering takeout.

Why is this important? We are partnering with brands on a decade-long journey, and how consumer behaviour may change (as it already is) as a consequence of GLP-1 drugs will be an important factor in products and services.

GLP-1 Drug Users Spending Less on Restaurants & Food Delivery

The 300-person survey covered Americans early in their weight loss journey but made substantial dietary and budgetary shifts. When asked about their monthly spending on eating out at restaurants since starting on a GLP-1 drug, 63% of respondents said they were spending less, while only 9% were forking out more. Similarly, 61% spend less on food delivery or takeout, with just 8% spending more.

🇮🇳 After 22 years of compounding, India will soon become the third-largest consumer market

To those who know me, I sound like a broken record. I have been talking about India’s GDP growth and the opportunities its consumer market offers. I have been preaching this since 2002 when I first started investing in Indian consumer brands.

India to surpass Germany, Japan to be 3rd largest consumer market by 2026: UBS

Over the past decade, India's consumption has almost doubled to $2.1 trillion in 2023, up from $1.2 trillion in 2013.

🛒 India retail is poised to be a $2.2Tn market by 2030; 90% of the market will still be delivered offline

Slowly but surely, online and offline are converging. This presents a unique yet challenging opportunity for insurgent brands to develop a holistic consumer experience that meets the specific needs of their consumers. This will be hard, but those who play it right have India’s huge TAM to enjoy.

Click here for the full report. from our friends at Accel, Fireside Ventures and Redseer.

D2C brands uniquely poised to tap $2.2T Indian retail market: Report

The online retail market is expected to reach $200 billion by 2030, compelling both upcoming and established brands to venture beyond their pre-existing distribution channels, said the report Decoding Omnichannel: Strategies for D2C Brands by Accel, Fireside Ventures & Redseer Strategy Consultants.

🍷 Sula goes all-in premium

Sula Vineyards COO Karan Vasani sees the wine segment in India growing on the premiumisation wave.

Sula Vineyard exits the value segment.

Although wine accounts for less than 1% of the alcohol-beverage industry in India, compared to 10 % globally, Sula owns 60% of the market share within the country.

🏸 Podcast: CultSport wants to be Decathlon

Can it?

Why Cult.fit wants to be more like Decathlon

Cult.Fit wants its in-house D2C brand, Cult.Sport, to be the next Decathlon. But it doesn't help that the brand has had a rocky ride.

🐿️ 2 nominations for Pip & Nut

Pip & Nut has been nominated twice at The Grocer Gold Awards 2024, with Pip & Nut being nominated for Food Brand of the Year and founder Pip Murray being for Entrepreneur of the Year.

The Grocer Gold Awards 2024 - Finalists 2024

Finalists announced!

📰 Select funding & deal news

Funding and deal news that caught my attention this week

Mother Science closes US$3.5 million funding round

Mother Science has closed a US$3.5 million funding round led by Greycroft. Under the terms of the deal, Greycroft Partner Katherine Power will join the skincare brand’s Board of Directors. The funds will be invested in R&D, further innovation, product launches and team growth.

Ketone Energy Drink KEY Launches with $4M

It’s putting ketones over caffeine.

DaMENSCH raises fresh capital from existing investors

D2C men’s lifestyle brand DaMENSCH has raised Rs 21.62 crore ($2.5 million) from existing investors in its extended Series B round.

Superplum raises $15M from investors to expand fresh fruits business

The round was led by the company's incoming Chairman, Erik Ragatz, former Partner and current Senior Advisor of the global private equity firm Hellman & Friedman.

Three Ships Beauty Raises $2.5M To Fuel Its Next Stage Of Growth

The Toronto-based natural skincare brand’s first priced round gives it a post-money valuation of $20 million.

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