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September 5, 2025
Shalinee Mishra, Exchange4Media
5 September 2025
Retailers in India are waking up to a hard truth: customer acquisition can no longer ride on advertising alone. Digital ad spends grew by 14-17% in 2024, touching nearly ₹50,000 crore (as per Pitch Madison report) and accounting for 46% of India’s total ad market. But with customer acquisition costs (CAC) rising 30-35% year-on-year and consumer attention fragmented across platforms, the ad-first growth engine is showing strain. What is emerging instead is an ecosystem where content in the form of video, celebrity-led storytelling, or creator-driven engagement is becoming the direct funnel to commerce.
Flipkart for instance is building influencer production hubs and embedding shoppable videos, Myntra has rolled out its video-first Glamstream, and Amazon has long blurred the line between streaming and shopping through Prime Video and Fire TV. From short videos to celebrity gossip, from beauty blogs to shoppable livestreams, e-commerce giants are no longer just marketplaces; they are evolving into media houses and the trend is only growing.
According to Mindshare’s latest Content Trend Report, India’s branded content marketing industry is now worth ₹10,000 crore, growing at nearly 20% annually, with video formats making up almost half of all spends.
India already has over 270 million online shoppers, a number that Bain projects will rise to 350 million by 2027, making it the world’s second largest e-retail user base. That scale is creating fertile ground for shoppable video and live commerce to take off.
Globally, branded content spend is projected to cross $500 bn by 2027. As per PwC estimates, India’s share is still <2% but among the fastest growing.
Video commerce today largely follows two prominent models. The first is driven by social platforms such as YouTube, Instagram, and Facebook, where shoppable posts allow users to move directly from content to purchase. The second is led by e-commerce platforms like Amazon, Myntra, Nykaa, and Flipkart and others which have added video sections to create immersive shopping experiences within their apps.
Within this, live commerce has emerged as a high-potential format. Meesho and Flipkart, for example, are leading the charge with 2-3% conversion rates, generating an estimated $150-200 million in GMV during festive 2024. Events like Flipkart’s Big Billion Days show how timed livestreams can capture active, purchase-ready audiences.
Meanwhile, influencer-led short videos are driving conversion rates as high as 63%, with beauty and personal care (BPC) and food & beverages (F&B) among the top categories benefiting from this shift. Redseer projects India’s live commerce market could touch $4-5 bn GMV by 2027, up from less than $300 mn today. This surge in shoppable video and live commerce is only the surface of a deeper structural change, one where content itself is becoming the moat that protects brands from rising ad costs, fragmented attention, and fickle consumer loyalty.
Beyond ads: Why content has become retail’s strongest defence
Chirag Taneja, co-founder of e-commerce enablement company GoKwik, framed the trend as a fundamental shift in ownership.
“It’s not just about enhancing top-of-funnel reach, it’s about owning demand, connection, and the touchpoint with end shoppers. For years, brands relied on ads to bring traffic. But acquisition costs have been rising, attention is fragmented, and privacy shifts have made targeting difficult. That’s why content is now the moat. When companies acquire content firms, they’re not just buying eyeballs, they’re securing access to communities that trust and engage with that content.”
According to him, content is collapsing the traditional funnel. “One short video or livestream can take a consumer from awareness to purchase in under a minute. That’s why we see D2C brands treating content as a compounding asset, not just an expense,” he added.
Devangshu Dutta, founder and CEO of management consulting firm Third Eyesight, echoed the sentiment.
“Large companies are buying or partnering with content-driven platforms to capture attention beyond transactional touch points. Short video, regional language content, and influencer-driven discovery are embedding commerce within entertainment. If you want to sell more than a commodity, storytelling is critical. Content builds credibility, differentiation, and trust in a cluttered and price-sensitive market.”
Flipkart bets big on media and creators
The shift is already reshaping strategy at India’s biggest retailers, and Flipkart has moved fastest. Its move to acquire a majority stake in Pinkvilla, a platform built on entertainment and celebrity news signals a clear push to deepen ties with Gen Z and millennials, a cohort that consumes content first and shops later.
“Our acquisition of a majority stake in Pinkvilla is a critical step in our mission to deepen our engagement with Gen Z. Pinkvilla’s robust content IPs and strong connection with its loyal audience base are assets that will accelerate our efforts to leverage content as a key driver of growth,” said Ravi Iyer, Senior Vice President, Corporate at Flipkart.
Flipkart in the last year has exited investments in companies like Aditya Birla Fashion & Retail, where it sold its 7.5% stake in the owner of Pantaloons, Van Heusen, Louis Philippe and Forever 21, as well as BlackBuck, the trucking marketplace that powers India’s mid-mile logistics.
At the same time, the company has doubled down on content and creators. Its Pinkvilla acquisition gives it access to a platform reaching over 60 million monthly users, while in-house features like Flipkart Feed already clock 5–6 million daily video views, highlighting how commerce and content are converging at scale.
Alongside this, Flipkart has launched Creator Cities in Mumbai, Bengaluru and Gurgaon, production hubs designed for influencers to shoot and scale shoppable content.
It has also introduced Flipkart Feed, a TikTok-style vertical video feature embedded in its app, offering bite-sized, influencer-led, fully shoppable videos. Myntra, its fashion arm, has developed Glamstream, with more than 500 hours of video-first shopping content across music, beauty, travel and weddings, featuring stars like Badshah, Tabu, Zeenat Aman and Vijay Deverakonda.
Flipkart has also partnered with YouTube Shopping, allowing creators with over 10,000 subscribers to tag Flipkart products in videos, Shorts and livestreams, enabling viewers to buy directly while creators earn commissions.
Amazon’s head start in content-commerce convergence Flipkart is not alone. Its biggest rival Amazon has long understood this convergence. Through Prime Video and its original programming slate, Amazon has built an entertainment ecosystem that doubles as a commerce funnel. The shows and films on Prime do not merely entertain; they drive shopping behaviour, influence trends, and lock audiences into Amazon’s larger universe of services. With Fire TV and Alexa integrations, the company has blurred the line between watching and buying, a model others are now racing to replicate.
D2C brands treat content as growth engine
Closer home, the Good Glamm Group, now closed, had pioneered a content-led commerce ecosystem in beauty and personal care. Through acquisitions like ScoopWhoop and MissMalini Entertainment, the group stitched together a portfolio where content platforms brought in audiences, who were then nudged towards its direct-to-consumer brands.
This “editorial-to-checkout” model demonstrated how cultural capital could be translated into purchase pathways. Alibaba has taken the strategy global. With stakes in Youku, a leading video-streaming platform, and Alibaba Pictures, the e-commerce titan integrates entertainment with retail operations. Taobao Live has shown how livestream shopping can dominate consumer behavior, particularly inAsia, creating billion-dollar shopping events entirely dependent on
entertainment-driven discovery.
Shopify, meanwhile, has invested in tools that empower merchants to become content creators themselves. Its partnerships with agencies like Sanity and investments in platforms such as Billo reflect a clear intent to enable retailers to embed storytelling, gamification, and user-generated content into their selling journey. Unlike large marketplaces, Shopify’s vision is not to own the content but to democratize access to it for small and mid-sized businesses.
From content to commerce
This content includes newsletters, creator partnerships, branded podcasts, and niche communities on social media. The idea, as industry experts note, is to treat content as an asset that compounds, not just as a cost.
Unlike ads, content continues to generate discovery and engagement long after it’s published. That’s why more D2C brands are making content central to their growth strategies.
Several big names are experimenting in this space. Durex, Plum, Mother Dairy, and HDFC Bank have launched their own podcasts where celebrities share stories along their brand journey. Founder-led podcasts too are on the rise on YouTube, with voices like Nitin Kamath and Deepinder Goyal drawing large audiences in India.
The big question, however, is whether content consumption can effectively be converted into product discovery and purchase pathways. “It’s already happening at scale,” said Taneja. “Content is redefining every aspect of the traditional funnel. In the past, you had awareness at the top, intent in the middle, and purchase at the bottom. Today, one short video or live stream can take a consumer through that entire journey in under a minute.
“From a D2C lens, this convergence is even more critical. D2C brands thrive on agility, the ability to turn trends, storytelling, and community engagement directly into sales. Platforms like Instagram, YouTube, TikTok, and even WhatsApp have embedded shoppable features, which means the content is no longer just ‘top-of-funnel.’ It’s the storefront. But the magic lies in authenticity and design. Consumers don’t want to feel ‘sold to’, they want to feel entertained, inspired, or educated. If the content does that well, conversion becomes a natural byproduct. For example, an athleisure brand showing a workout routine isn’t just demonstrating leggings, it’s giving value. The leggings purchase becomes an easy next step, not a forced pitch.”
The big question: Will content sustain sales at scale?
Taneja further reveals how content is driving sales and long-term growth. “The smartest brands, especially in D2C, have realized that high-quality
content is their most defensible growth engine. Performance marketing will continue to play a role, but the real long-term moat is the kind of content that builds relationships, trust, and recall. Consumers today are spoiled for choice. They don’t buy just products, they buy stories, values, and communities.
“High-quality content allows a brand to consistently show up in ways that feel relevant and credible. And from a business lens, it directly impacts unit economics: it reduces CAC because organic discovery compounds over time, improves LTV because content nurtures loyalty and repeat purchases, and builds resilience because brands with strong content ecosystems are less dependent on fluctuating ad platforms.”
The D2C ecosystem in India is already proving this point. Beauty and personal care brands now run editorial-led platforms alongside commerce, while fashion labels thrive on creator collaborations and storytelling-driven product drops. Their growth is not accidental but built on content strategies that treat every piece not just as a post, but as a business driver.
As an enabler, Taneja adds, the results are visible across platforms. “Brands that invest in content see better conversions on our checkout stack, lower cart drops, and stronger repeat cohorts. Content doesn’t just spark sales it sustains them.”
For all the optimism, the test for content-driven commerce will lie in scale and sustainability. Rising conversions in beauty, fashion, and food show the model works, but questions remain on whether every category can replicate that success, or whether consumers will tire of content-heavy shopping pitches.
(Published in Exchange4Media)
admin
August 18, 2025
Hiral Goyal, The Morning Context
18 August 2025
A trend that has been playing out through big and small changes over the last two decades is that in urban India the kirana store is easily replaceable.
When it comes to buying groceries, urban Indians have a number of options. They can visit a fancy supermarket run by a conglomerate or order online through a number of e-commerce and instant-delivery companies. And if the above doesn’t seem easy enough, they can hop over to a nearby mom-and-pop store.
It would appear it is now the turn of smaller towns in the country to witness the kirana disruption. Even though 99% of grocery shopping in these tier-3 cities is done through neighborhood general stores, there are startups that believe this is an outdated and inefficient form of retail and a change is in order.
One such company is SuperK. The startup’s mission is to build a grocery store model in small towns that has all of the advantages of modern retail packed in a compact 800-square-foot store. This is what Anil Thontepu and Neeraj Menta had set out to do when they founded the company in 2019. The idea was to bring a modern trade-like grocery shopping experience to small-town India a wide assortment of products at a better value.
“There is a cost-efficient world of general trade and a customer-loving world of modern retail,” says Thontepu. “We wanted to see if we can bridge this gap…and do something for the small-town people by bringing the best of both these worlds.”
Over the past five years, the Bengaluru-headquartered startup has opened over 130 stores across 80 towns in Andhra Pradesh. And it doesn’t want to stop there. The company wants to expand to another 300 towns in Andhra Pradesh and nearby states of Karnataka and Telangana over the next 24, months. That’s quite an ambitious target. But the founders believe the market size for Superk is so large that they should be able to build a Rs 2,000-3,000 стоore ($228-342 million) annual business from Andhra and Telangana alone.
To fuel this expansion, Superk raised Rs 100 crore ($11.7 million) in Series B funding last month. The round, led by Binny Bansal’s 3STATE Ventures and CaratLane founder Mithun Sacheti, valued Superk at 2-2.5x its previous valuation of Rs 160 crore (about $18.25 million) in 202/
Now, Superk is not entirely unique. It competes with startups like Frendy, Apna Mart and Wheelocity, which are also trying to organize the retail market in India’s smaller towns. What sets SuperK apart is its larger, bolder approach. Grocery chain Apna Mart, for instance, runs franchisee stores in tier-2 or tier-3 markets and also offers 15-minute home delivery, SuperK’s focus is only on supermarkets. Frendy operates mini-marts and micro-kiranas in villages and towns with fewer than 10,000 people, but SuperK targets small towns with populations between 20,000 and 500,000. And Wheelocity supplies only fresh produce to rural areas, while Superk sells dry groceries as well as packaged consumer goods.
This rather radical shift in focus-away from tier-1 and tier-2 cities-ties in with India’s changing consumption pattern. “Consumer mindsets are changing even in smaller cities,” says Devangshu Dutta, founder and chief executive of Third Eyesight, adding that these consumers are beginning to favour more modern retail environments. And NielsenIQ’s latest report says rural markets in India grew twice as fast as cities between April and June 2025.
In this landscape, SuperK fits like a glove, with its franchise-first approach. Thanks to an asset-light model, the company has the agility to go deeper into smaller towns.
But it won’t be all that easy either. As Dutta says, “Changing grocery habits is a long, capital-intensive game.” Moreover, big retail chains are also jumping on the bandwagon. Hypermarket chain Vishal Mega Mart, for instance, already operates 47% of its stores in tier-3 cities and plans to expand into cities with populations exceeding 50,000. Supermarket chain operator DMart is also focusing on tier-2 and tier-3 cities.
However, Superk founders believe they are prepared for the challenge. Menta says the startup has arrived at a business model that is scalable, sustainable and, more importantly, offers value to its customers.
It’s too early to say whether they will be successful in this endeavour. That said, SuperK appears to have built a smart retail business for small-town India.
Refining small-town retail
SuperK’s founders have drawn inspiration from domestic and international retail chains like DMart and Costco. But they haven’t duplicated their strategies and made their own tweaks instead. For instance, large retail chains usually run company-owned and company operated, or COCO, stores. Though this approach is more cost-intensive than the franchise model, it allows a company to ensure a uniform customer experience across all outlets:
Superk doesn’t do that. It runs only franchise-owned and franchise-operated (FOFO) stores, which are no bigger than 800 sq ft. The company is not the first to have experimented with this model, but Thontepu believes that everyone else before them “did not try with the right spirit”. A franchise-owned store, argues co-founder Menta, is run differently from a company-owned store one has to keep in mind the store owner’s incentives, needs and concerns.
Under the franchise model, entrepreneurs invest between Rs 12 lakh (about $13,690) and Rs 15 lakh (about $17,110) to set up a Superk store. Of this, Rs 4 lakh (nearly $4,560) is spent on the store fit-out and infrastructure, the rest goes towards buying inventory. These stores, according to Menta, typically achieve a breakeven point after six months. On average, a retail store takes longer than that-12-15 months to reach breakeven.
Superk fills the shelves by procuring its inventory directly from brands as well as distributors. “The inventory is recommended by us through a mobile application. Store owners have an option to make certain changes within the limits that we have set for them,” says Thontepu. Revenue is shared and the model is similar to the one followed by nearly all retailers in India. Franchisees earn varying levels of margins on different kinds of products, depending on how easy or tough it is to sell those items. For instance, staples like dal and rice have lower margins, while confectionary items and products that need greater effort to sell enjoy higher margins of up to 20%.
In addition to this, there’s a private label business, especially loose items like pulses. In fact, private labelling is part of the company’s efforts to bring some standardization in India’s unorganized retail market. “A customer coming to our store should be able to blindly expect consistent quality on the product they’re buying,” says Menta. “We have organized our sourcing, processing, cleaning, packaging, testing. Everything that a brand would do to provide a great-quality product to their customer.”
Unlike distributors or other retailers who operate franchise models though, Superk claims that it does not dump its inventory on store owners. Menta says the franchise structure is designed in a way that Superk does not benefit from selling unnecessary stock to store owners. “If I lose, he will lose. If he loses, I lose. That is the way (the structure) is created. We, in fact, recommend owners to remove some products if they are not selling.” says Menta.
On the customer side of things, Superk’s value proposition comes down to offering the best prices. More than a year ago, for instance, it introduced a membership programme that offers customers cashback that is redeemable on their future purchases. “If they pay Rs 300 [approximately $3.5) for a six-month membership, they get 10% cashback on all purchases that they are making up to Rs 300 every month,” explains Thontepu. He says 35-40% of Superk’s more than 500,000 customers are enrolled in this programme.
All of this sounds good even promising in theory. But will it be enough to build a sustainable and scalable retail business?
A long, hard look
Let’s first look at what really works in SuperK’s favour.
One, the focus on selling staples under a private label brand. This has been done successfully before. One example is Nilgiri’s, one of India’s oldest supermarket chains.
Founded in 1905, Niligiri’s operated under a franchise model and sold dairy, baked goods, chocolates and other items produced under its own brand. The supermarket chain was sold by debt-ridden Future Group for Rs 67 crore ($7.65 million) in 2023, less than one-third the price the latter paid to acquire the company from private equity firm Actis in 2014. However, its history is worth learning from.
Shomik Mukherjee, a Delhi-based consumer goods advisor who was a partner at Actis while the firm was in control of Nilgiri’s, recalls the value proposition created by Nilgiri’s private label products. “In the case of private labels, it is essential for a company to have a reason why people will walk into that store. For Nilgiri’s, it was bakery and dairy products,” says Mukherjee. Owning a private label that brought in customers also ensured that franchisee owners had incentives to continue working with Nilgiri’s. “It is about giving the franchisees a safe portfolio of private label goods that are desired by customer instead of something that is shoved down the franchisees’ throat to derive margin,” he says.
You see, the overall grocery business operates on a very low margin. But private labelling, says Satish Meena, founder of Datum Intelligence, offers the highest margins – 35-40% – in the grocery business, after fresh produce, making it a lucrative business to get into.
Superk, which sells essential items through its private label, has the opportunity to earn better margins in grocery retail. More importantly, private labelling holds the potential to become SuperK’s identity and boost customer retention and loyalty.
Two, SuperK’s franchise model allows it to expand to more locations rapidly as compared to a regular modern trade chain with company-owned stores, says Mukherjee. This model makes SuperK’s business asset-light and brings down the cost of running a network of stores. “Under this model, the franchisor does not incur the upfront cost of opening a store or having to deal with the trouble of hiring and replacing store managers,” he adds. Since most store owners in a franchise model are landowners, there is a greater stability in operations as well, he explains. Moreover, Superk stores are quite small (800 sq ft), allowing easier availability of property.
The franchise model, however, is not entirely foolproof. One of the inherent problems is the difficulty in implementing standard operating procedures (SOPs) across all stores. And the problem only worsens as the company expands operations to different cities. While Superk stores boast a no-frills fit-out that can be easily set up anywhere, how these stores are maintained through the wear and tear over the years is yet to be seen.
A bigger fear is that the store owner may start running their own store without the Superk branding. “If Superk loses the franchisee owner, it also loses the location in which the store was operating,” says Mukherjee.
Moreover, most franchisee owners in the retail business typically tend to be experienced general store owners who might not be willing to adopt new technology. “Since they have run a store before, they think they know how and what to order for inventory and may not follow SuperK’s tech-enabled recommendations,” says Mukherjee.
There’s another problem. While the founders claim to have seen considerable success (35-40% sign-ups) in the rollout of SuperK’s membership programme for customers, Third Eyesight’s Dutta raises concerns about its future growth. “Indian consumers’ price sensitivity limits membership fee potential,” he says. According to him, the programme’s value in the tier-3 market lies more in customer acquisition and retention than direct revenue generation. “Long-term success requires a cashback programme to drive purchase frequency and basket size increases to offset the costs,” says Dutta.
Menta, however, has a different view. He says SuperK’s subscription is designed in a way that benefits customers only when they make full basket purchases. Moreover, the company has different pricing slabs for membership depending on the various basket sizes, which makes the model more viable. Considering the programme is a little more than a year old, it is still too early to judge whether it will find a lot of takers in small towns.
For now, the founders are in no hurry to expand their business across India. “There is no reason to go into five states. Then, you are spread thin and your economics will not work out. It’s a business of managing operations at a very low cost,” says Menta. The plan is to stick to one region and continue to go deeper into it. “A lot of our competitors who started five years ago spread to so many places that it became very difficult for them to manage,” he adds.
This is also the crux of how Thontepu and Menta are building SuperK. By implementing what they have learnt not only from their own experiments, but also from the failures and successes of other businesses. While there’s no guarantee that Superk will become a roaring success, it does appear to have set an example by starting small and growing patiently. And if the latest funding is any proof, investors are interested.
(With inputs from Neethi Lisa Rojan)
(Published in The Morning Context)
admin
June 1, 2025
Sharleen Dsouza, Business Standard
Mumbai, 1 June 2025
Reliance Consumer Products is in a sweet spot – and it intends to stay there. Launched barely three years ago, the company has already entered the list of India’s top 10 fast-moving consumer goods (FMCG) players by revenue in the 2024-25 financial year (FY25).
After making headlines by acquiring Campa Cola in 2022 — and taking the brand overseas in under two years — Reliance Consumer Products quickly expanded into food and non-food categories under the ‘Independence’ brand. Now, it has trained its sights on a new frontier: Confectionery.
This marks the company’s third major focus area after gaining traction in beverages and staples. Though present in biscuits and namkeens, its immediate priority is grabbing a share of the Indian consumer’s pocket change — via candies, chocolates, and toffees.
Its entry into the confectionery business began quietly in 2022 with a pilot of Joyland candies in Uttar Pradesh. It soon went on an acquisition spree — first picking up the 30-year-old Maharashtra-based Toffeeman brand in 2023, followed by a 51 per cent stake in Lotus Chocolates, and then acquiring the 82-
year-old Ravalgaon, home to nostalgic brands like Pan Pasand, Mango Mood, and Laco. It has been steadily building a formidable candy arsenal.
However, the Mukesh Ambani-led company isn’t limiting itself to Re 1 or Rs 2 price points. According to a source, it is developing an end-to-end confectionery portfolio — across toffees, candies, and chocolate-based products — and plans to enter sub-segments like gums, jellies, and lollipops. It is also betting on old-school favourites, launching chocolate-based confections such as eclairs, Lotus Symphony (toffee with a chocolate centre), and Lotus Zellers (moulded chocolate miniatures).
It is piloting distribution in five states — Maharashtra, Karnataka, Telangana, Andhra Pradesh, and Uttar Pradesh — with plans to go pan-India this fiscal and reach one million outlets, the source added.
Why the big bet? The Indian confectionery market is expected to grow from Rs. 37,900 crore in 2024 to~59,700 crore by 2033, at a compound annual growth rate of 5.2 per cent, according to global consultancy IMARC Group. North India leads the market with a 32.8 per cent share. IMARC adds that modern retail formats, better digital connectivity, and product innovation are driving market penetration in both urban and semi-urban areas.
India’s sweet tooth has deep roots. Parle began selling candies in the 1920s, followed by Ravalgaon —now part of Reliance Consumer Products’ growing portfolio – in the 1940s.
Experts say the company’s strategy from the start was clear: Dominate. And it has the war chest to play the long game.
“Over two decades, Reliance has gained consumer-side experience and enormous momentum through various retail formats, and has figured out vertical integration in procurement,” said Devangshu Dutta, chief executive officer of consultancy Third Eyesight.
“Its experience in staples comes from private labels, and starting with Campa, its acquisitions in food, beverage and FMCG have grown. As a group, it has the muscle and a long-term approach to make a mark in the market.”
Dhanraj Bhagat, partner at Grant Thornton India LLP, pointed out thatthe FMCG market is notoriously tough — especially when scaling regional brands nationally. “But Reliance has deep pockets for brand building,” he said. That’s what sets it apart — it can spend big and be patient, he added.
While the company is making a dent via its distribution penetration strategy, it also needs to spend on publicity, Bhagat added. “Reliance has the money, so it is a different ball game for it as this gives the company the ability to spend and play the long-term game.”
Reliance Consumer Products is also offering higher margins to distributors in categories like Campa and confectionery, giving it a competitive edge. Its aggressive incentives have forced rivals to raise their own distributor margins — a sign of how this sweet battle is heating up.
(Published in Business Standard)
admin
May 5, 2025
Mint, 5 May 2026
Priyamvada C., Sneha Shah
Urban India’s pet parents are driving a wave of investor interest in the pet care space. A clutch of startups such as Heads Up For Tails, Supertails, and Vetic are now in fundraising talks amid rising demand for premium products and services
While Supertails looks to raise about ₹200 crore by the end of this year, Heads Up For Tails is eyeing an investment from domestic investment firm 360 One Asset over the next few months, according to mul tiple people familiar with the matter.
Vetic, a tech-enabled chain of pet clinics, is looking to raise a sizeable round and has begun discussions with investors, they said, adding that some of these transactions may see existing investors part exit their stake.
Supertails and Vetic did not immediately respond to Mint’s requests for a comment. While 360 One declined to comment, Heads Up For Tails’ founder Rashi Narang denied the development.
Investor interest in pet care surged in the years following the pandemic, driven by a wave of new pet adoptions and rising disposable incomes. In 2023, pet care startups raised a record $66.3 million across 16 rounds, led by one major transaction ― Drool’s $60 million fundraise.
While 2023 saw a funding spike driven by Drool’s large deal, overall funding activity in 2024 was more broad-based, with fundraising at $17.9 million spanning 13 rounds, as per Tracxn.
“Pet ownership in India is estimated to be less than 10% of overall households, but growing at a rapid pace with rising incomes, especially among urban consumers. In developed economies, pet ownership can exceed three in four households, and that headroom for growth is reflected among the upper income segments in India,” said Devangshu Dutta, chief executive of Third Eyesight, a management consulting firm.
He added that urban couples and singles in many cases are even opting to become “pet parents” instead of having children.
Platforms such as Supertails, Drools and Heads Up For Tails have been the big beneficiaries of this shift. Drools raised $60 million from LVMH-backed private equity firm L Catterton in 2023, while Supertails raised $15 million led by RPSG Capital Ventures in February last year.
Similarly, Supertails, which is in talks to acquire Blue 7 Vets, a multi speciality veterinary clinic, as part of its strategy to expand offline, will also raise capital to fund the acquisition of new customers, investments in technology, and the expansion of healthcare services, including Super-tails Pharmacy and build an omni-channel experience for consumers.
The company raised about $15 million in its series B funding round last year led by RPSG Capital Ventures and existing investors Fireside Ventures, Saama Capital, DSG Consumer Partners and Sauce VC.
(Published in Mint)
admin
December 31, 2024
Jasodhara Banerjee, Forbes India
31 December 2024
Once, there was alabaster. Then, there was porcelain. And now there is glass. And no, we are not talking about the different kinds material to make fine, delicate objet d’art, but the quality and texture of facial skin—smooth, flawless and luminescent—that humans aspire to.
While a Google search for the term ‘glass skin’ will churn out hundreds of results that describe not just what the term means—tracing it to Korean skin care routines and products—but also detail the meticulous steps, varying between five and 11, that will apparently make you look like your favourite K-pop singer or K-drama actor. Like all things K (read: Korean), be it television and OTT serials, or food and clothes, K-beauty seems to have taken the Indian market by storm. A search for ‘Korean brands’ on online platforms such as Nykaa and Tira Beauty brings up more than a thousand products, ranging from ₹75 for a facial sheet mask to ₹17,900 for 60 ml of face cream. Clearly, there is something for everybody.
Fuelling this surge has been a plethora of factors, including the rise of online marketplaces that have made Indian and foreign skin care and beauty products more accessible than before, the thriving ecosystem of influencers and content creators that has revolutionised the marketing of these products, and, of course, consumer demand for products that claim to have the goodness of natural ingredients backed by the surety of science. And, surprising as it may seem, the Covid-19 pandemic and accompanying lockdowns also seem to have played a role in this.
Case in point is Amorepacific Corporation, a Seoul-headquartered beauty and cosmetics company that operates in more than 50 countries, and has a portfolio of more than 30 brands, such as Sulwhasoo, Laneige, Mamonde, Etude House and Innisfree. It is one of the largest cosmetics companies, not just in South Korea, but in the world.
“We are the number one beauty and personal care brand in South Korea and were the first Korean corporation to enter India with direct management, with our own subsidiary,” says Paul Lee, managing director and country head, Amorepacific India. “We started our business in India with Innisfree, which uses natural ingredients from Jeju Island in South Korea. We started with Innisfree because India had a huge demand for brands with natural products. Then we introduced Laneige and Sulwhasoo, which fall in the luxury skin care segment, and these were followed by Etude, which is a makeup brand.”
Amorepacific entered India sometime in 2012, taking tentative steps in a fledgling market with minimal investments and a retail store in Delhi’s Khan market. “At that time, the awareness of K-beauty was very small, and our momentum of growth started with the popularity of dedicated ecommerce players like Nykaa. In the last seven years, our annual growth has been 50 percent, our current growth is 60 percent year-on-year,” says Lee.
A potent potion for growth
Although industry players and experts feel there are multiple factors behind this growth, the popularity of Korean cultural elements is a significant one. “Korean beauty and personal care brands have multiple enabling factors. The global expansion of Korean beauty and personal care products has been on the back of a cultural export wave like any other earlier in history; in this case through the growing popularity of K-pop and K-dramas,” says Devangshu Dutta, founder, Third Eyesight and co-founder, PVC Partners. “In India, these brands initially had an influence in the Northeastern states, where customers are usually ahead on the fashion curve and also find resonance with the look of these brands.” He adds that factors such as the increasing number of Indian tourists to East Asian countries, and the growing presence of Korean and Japanese expatriates within India have also supported the growing footprint of these brands.
A spokesperson for Tira Beauty, which was launched in April 2023, agrees with Dutta, and attributes the demand for K-beauty products to the exposure that consumers have to K-dramas and K-pop. However, she adds that a significant factor is rooted in the products themselves. “These are the innovations that these brands are bringing to the table,” she explains. “The kind of formulations they offer are very well-suited for the Indian consumer. The ingredients are very efficacy oriented, and deliver a lot of quality, thus resolving a lot of concerns that consumers in India have.”
For instance, skin hydration is a core need of consumers, and a lot of Korean skin care products focus on hyaluronic acid as an ingredient. “Consumers who have sensitive skin or inflammation as a key concern get to use ingredients like centella asiatica, that a lot of Korean products use,” she says.
The spokesperson adds that the texture of the products is also a factor behind their popularity in India: “A lot of Korean sunscreens are light weight, a lot of their essences are suited for the Indian skin and the Indian weather. Both these factors are contributing to the rise we are witnessing in the space of K-beauty.”
Lee of Amorepacific highlights the use of unique ingredients such as fermented beans, ginseng and green tea that were never used before by American or European companies. There are also many options for consumers to choose from, depending on what is best suited for them. For instance, there is a product line with green tea for consumers with sensitive skin, and the same products are available for those with dry skin. “There are three key metrics that we have seen among Indian consumers: One is the demand for premium quality, two is the demand for glass skin, and the third is reliability.”
Lee also attributes market factors that have been instrumental in making Korean products more accessible to Indian consumers. “There has been a lot of change before Covid, and after Covid. From the macro perspective, the number of internet users with access to low-cost data plans has increased. During the Covid-19 pandemic, the number of new people watching OTT platforms such as Netflix also surged. From the Netflix perspective, I think India is one of the top three countries, where the number of subscribers is concerned.”
According to the Korea Trade-Investment Promotion Agency, the beauty market in India saw substantial growth following the Covid-19 pandemic and is projected to expand by 10 percent annually from 2022 to 2027, more than twice the global average growth rate for the beauty sector. According to market analyst Mordor Intelligence, the K-beauty market in India is expected to grow annually by 9.4 percent from 2021 to 2026.
Lee highlights the popularity of Korean OTT series such as Squid Games in making Indians familiar with Korean culture, and YouTube videos making a lot of people aware of K-beauty. “When we started operating in India, there were hardly two or three brands operating here, but currently there are more than 60 Korean brands in India. The influence of TV and music content has made people familiar with Korean culture, which is similar to Indian culture in being family-centric,” he adds.
Content creator Scherezade Shroff Talwar says, “The Hallyu [Korean] wave during the pandemic has definitely contributed to, what I would say, an over-consumption of Korean culture and I definitely contribute to it as well. K-beauty products have been around in India for a while, but with the increasing popularity of K-dramas and K-pop, people are seeing more such content across multiple platforms. This has contributed to the rising number of Korean brands in India, and the use of their products.” She recalls how, in November, she was in South Korea with her K-drama club, and the members had lists of the products that they wanted to buy there because they are not available in India.
According to a September report by market research firm Mintel, social media analysis in India reveals that there have been 6.2 million posts in the last two years discussing K-drama, K-pop, and K-beauty trends, predominantly among the 19 to 24 age group. This continued popularity in K-pop throughout the APAC region influences consumers’ interest in Korean skin care and beauty products, the report adds.
Lee says that Korean beauty companies have also been prompt to react to the demands in the market. For instance, Innisfree introduces new products every three months, and they are based on consumer feedback through social media and actual stores. Given the demand from Indian consumers, Amorepacific has also formed a task force at its headquarters which is dedicated to reviewing and studying the Indian market, with plans bring in more brands and businesses.
Data shows, adds Lee, that the import of Korean skin care products into India is increasing by 63 percent every year, going up four times compared to 2020. Amorepacific’s own research shows that 53 percent of Indian beauty consumers have already tried Korean products. “Fifteen percent of the entire skin care products market is now dominated by Korean products,” he claims.
Although Amorepacific decided to close all 23 of its exclusive stores in India because of the losses suffered during the pandemic, it decided to partner instead with local channels such as Nykaa, Tira Beauty and SS Beauty, and its products are today available across 400 counters in 45 cities. “Although our company is seeing 60 percent growth every year now, our retail area is doubling every year,” says Lee. “Our aim is to be available in 500 counters within a year.”
The availability and accessibility of Korean skin care and beauty products have also coincided with the rise of marketing products through influencers and content creators. The spokesperson for Tira Beauty says that influencers have played a massive role in the popularity of Korean products. “One of the reasons why K-beauty products do well across markets is because Gen-Z consumers tend to follow a lot of these influencers,” she explains. For instance, Tira launched the Beauty of Joseon sunscreen, and it went out of stock very quickly. “We experienced this because there was a lot of awareness due to influencer activations, and there’s a certain amount of virality these products enjoy even before they are launched.” She also gives the example of the brand Tirtir, which was launched on Tira Beauty in India in November. “The brand rolled out samples to influencers in India in July, and that helped propel demand to a great extent.”
According to business consulting firm Grand View Research, celebrity influencers have been beneficial to marketers due to their global reach, which often transcends cultural boundaries. Hence, the top strategy used by Korean cosmetics brands is to sell their products to Korean celebrities. Storytelling using Korean celebrities as brand ambassadors, and streaming advertisements and video tutorials all over the social media platform are some of the major strategies adopted by K-beauty brands.
Grand View Research gives the example of the lip layering bar of Laniege, which has emerged as a convenient tool for those who want to get the trendy gradient lip look with just a single application. Celebrities such as actors Song Hye Kyo and Lee Sung Kyung have used the product, enhancing its appeal and desirability among consumers.
Celebrities from different parts of the world promote K-beauty products, and this fosters a cross-cultural appeal and encourages individuals from diverse backgrounds to explore and adopt these products in their skin care routines. Following this global trend, in India, young celebrities have been roped in to appeal to Gen-Z consumers. For instance, actor Palak Tiwari became the first Indian brand ambassador for Etude, while actor Wamiqa Gabbi became first Indian brand ambassador for Innisfree, and Sara Tendulkar, daughter of cricketing legend Sachin Tendulkar, is the brand ambassador for Laneige.
Dutta of Third Eyesight says, “Influencers certainly have played a role in building the buzz around K-beauty and have formed a relatively cost-effective means to spread the message in the past. However, in recent years with a growing number of social influencers, there is more clutter as well on the channels.”
India not in the big league, but demanding
Although the rise of K-beauty products in India has been significant, the country remains a far smaller market for these brands compared to markets such as the US, Europe and China. According to Grand View Research, the global K-beauty products market size was valued at $91.99 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 9.3 percent from 2023 to 2030.
The consulting firm says the Korean cosmetics industry grew steadily during the Covid-19 pandemic, owing to an increase in awareness of the numerous benefits offered by the products. Moreover, due to a rise in popularity among consumers, major K-beauty companies are taking initiatives such as R&D, product launches, mergers and acquisitions to retain shares in the market and respond to changes in the marketplace by introducing a range of items.
Grand View Research valued the US market, one of the largest for K-beauty products, at $20.2 billion in 2021 and expects it to grow at a CAGR of 8.8 percent between 2023 and 2030. Compared to this, Statista valued the India K-beauty market at $486 million in 2021, and expects it to grow to over $1.3 billion by 2032.
Lee of Amorepacific says the US remains the largest beauty market as a whole, followed by China, Japan, the UK, France and India. “One of the differentiating factors between the US and Indian consumers is that the premium market in India is very small, and it is still a mass-product driven market,” he says. “Secondly, ecommerce in India is still quite small. In South Korea and the US, ecommerce just in the beauty segment, is 30 to 40 percent, while in India it is 13 percent. India is traditionally an offline market.”
He adds that despite the growth, Indians remain sceptical about whether Korean products are suitable for Indian skins, and there is demand for products that are made only for Indians. “Localisation, therefore, has become important for the company. Although we conduct clinical trials in different geographies, we are starting to take more feedback from Indian consumers, and we are ready to develop products only for the Indian market. For instance, we have introduced the Innisfree kajal and the Innisfree hair massage oil, and have developed lip colours for the Indian market.”
Although the company did not divulge revenue figures, it is expecting to grow six times in the next six years in India, and plans to introduce at least five more brands within the next seven years in this market.
(Published in Forbes India)
