Consumer

 

What's in store for retail, consumer firms in 2024: A mixed year with pockets of growth, challenges

The year 2023 saw the official end of the Covid-19 pandemic, bringing relief to many sectors, including retail and consumer-centric industries. However, as we look ahead to 2024, several challenges and opportunities are on the horizon:

1. Rural Demand: The rural consumer's role in shaping demand remains uncertain. While some expect sluggish growth, incentives during general elections or controlled inflation could stimulate demand in the latter half of 2024.

2. Volume Pressures: Retail and FMCG companies are facing volume pressures, especially if rural demand fails to match urban demand. Pricing interventions are nearly exhausted, making 2024 challenging.

3. Sectoral Dynamics: Travel continues to boom, while affordable housing faces pressure due to higher interest rates. Agri-tech shows promise in driving agricultural productivity but faces long-term challenges.

4. Luxury Segment: The luxury segment is experiencing significant growth, with increased demand for premium products and services. Companies like Mercedes, Audi, DLF, and Apple reported impressive sales in 2023, indicating a continuing trend in 2024.

5. AI Disruption: AI engines are disrupting retail and consumer spaces, from natural language search in e-commerce platforms to managing product returns and generating social media content. Super apps may gain traction in 2024, offering convenience across multiple services.

6. Internet Commerce: Internet commerce is expected to grow, with quick commerce witnessing a 20% growth rate. Physical retail remains relevant, with companies like Reliance Retail expanding their presence in tier-II and tier-III cities.

7. New Age Marketing: Purpose-led marketing focusing on narratives like nation, community, and environment will continue. Social commerce is growing, but concerns about influencer authenticity and inappropriate associations are emerging.

8. Talent War: Despite layoffs in some sectors, there will be a significant demand for talent in specialized roles such as AI, storytelling, product management, and research design.

Overall, 2024 is expected to be a mixed year with pockets of growth amid challenges, with the first half potentially more difficult than the second half.

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Beyond Old Monk and Captain Morgan: Rum goes premium, but are consumers ready to pay more?

The quote "Rum is just a name. Old Monk is an emotion." encapsulates the sentiment of many Indians, especially those in their 40s, who have grown up with rum as a constant companion through various life experiences. Old Monk, in particular, holds a special place in the hearts of many, symbolizing nostalgia, camaraderie, and simpler times.

In recent years, there has been a shift towards premiumization in the rum category, mirroring trends seen in other consumer segments. While rum has traditionally been associated with affordability and accessibility, new launches targeting the premium segment have emerged. This shift is driven by changing consumer preferences, a growing appreciation for quality spirits, and the desire for diverse drinking experiences.

Manufacturers are capitalizing on this trend by introducing premium rum brands with higher price points and a focus on quality. These brands cater to discerning consumers who are willing to pay more for a superior product and a unique drinking experience. Additionally, the rise of premium rum brands reflects India's evolving drinking culture and its growing acceptance of premium spirits beyond traditional favorites like whiskey.

Despite the emergence of premium offerings, traditional rum brands like Old Monk continue to hold sway over the market. Their affordability, familiarity, and emotional resonance make them timeless favorites among consumers. While premium rums may attract a niche audience, they are unlikely to replace established brands like Old Monk, which occupy a special place in Indian drinking culture.

In summary, the rum market in India is experiencing a shift towards premiumization, with the introduction of new brands targeting discerning consumers. However, traditional brands like Old Monk remain deeply ingrained in the cultural fabric and are unlikely to be overshadowed by the rise of premium offerings.

No free delivery for you, shopaholic, say Blinkit, Zepto

Quick commerce platforms like Zepto and Blinkit have recently implemented changes in their delivery fee policies, marking a departure from their previous approach of offering free delivery for orders above a minimum value. Instead, these platforms have now introduced mandatory delivery fees for all orders, regardless of their value. For example, Blinkit now charges INR16 for deliveries above INR149, while Zepto charges INR15 for orders above INR199. These changes reflect the platforms' efforts to improve profitability and reduce the burden of last-mile logistics costs. While delivery costs have decreased over time due to increased efficiency, platforms are now passing on some of these costs to customers. However, the introduction of mandatory delivery fees may pose challenges for price-sensitive Indian customers who have grown accustomed to free delivery services. Some customers express a preference for apps that offer free delivery above a certain order value. In addition to mandatory delivery fees, quick commerce platforms are also promoting subscription-based models like Zepto's 'Pass' and Swiggy Instamart's Swiggy One program, which offer benefits such as free deliveries and discounts for members. These subscription programs aim to incentivize customers to pay for convenience and loyalty. Overall, while the introduction of mandatory delivery fees may seem like a small change, it is a significant step for quick commerce companies in their journey towards profitability and sustainability.

Tapping into senses, not just taste: Indri, and other India-made single malts get global honours.

The allure of a good whiskey, particularly a single malt, is often described as an experience that engages all five senses. This sentiment rings true for many spirits enthusiasts, and some of the finest examples of single malts are being produced in India, as evidenced by their success on the global stage. Piccadily Distilleries, based in Haryana, gained international acclaim when its Indri Diwali Collector’s Edition 2023 Single Malt won the prestigious "Double Gold Best in Show" award in the Malt: Peated category at the Whiskies of the World Award in the US. Following this accolade, the company's share price experienced a significant surge, reflecting investor confidence in the quality of their product. The success of Indri Diwali Collector’s Edition sparked a social media frenzy and led to heightened demand, with retailers in Gurugram increasing the price of the bottle substantially. Despite the inflated prices, consumers continued to purchase the whiskey, demonstrating its popularity and perceived value. Piccadily Distilleries, traditionally known for its country liquor, has made a strategic shift towards premium single malts, with their Indri range leading the sales charts. The company's CEO, Praveen Malviya, anticipates a fourfold increase in sales volume for the current fiscal year. Other Indian distilleries, such as Amrut Distilleries and John Distilleries, have also garnered international acclaim for their single malts. Amrut Distilleries, in particular, achieved widespread recognition when its whiskey was ranked among the world's best by Jim Murray’s Whisky Bible. These achievements have bolstered the reputation of Indian single malts globally. While the Indian whiskey market is predominantly dominated by mass-produced, low-priced variants, there is a growing segment of consumers who appreciate the quality and craftsmanship of premium spirits. Indian single malts, with their diverse taste profiles and textures, are gradually gaining traction among discerning drinkers both domestically and abroad. The outlook for the Indian single malt market appears promising, with significant growth projected in the coming years. Awards and international recognition serve as valuable endorsements for these brands, driving consumer interest and demand. As Indian single malts continue to establish themselves as contenders on the global stage, they represent a unique and prized addition to the world of whiskey.

Legacy brands no more! New-age shoppers choose Zudio, Reliance Trends over Arrow and Allen Solly.

The allure of a good whiskey, particularly a single malt, is often described as an experience that engages all five senses. This sentiment rings true for many spirits enthusiasts, and some of the finest examples of single malts are being produced in India, as evidenced by their success on the global stage.

Piccadily Distilleries, based in Haryana, gained international acclaim when its Indri Diwali Collector’s Edition 2023 Single Malt won the prestigious "Double Gold Best in Show" award in the Malt: Peated category at the Whiskies of the World Award in the US. Following this accolade, the company's share price experienced a significant surge, reflecting investor confidence in the quality of their product.

The success of Indri Diwali Collector’s Edition sparked a social media frenzy and led to heightened demand, with retailers in Gurugram increasing the price of the bottle substantially. Despite the inflated prices, consumers continued to purchase the whiskey, demonstrating its popularity and perceived value.

Piccadily Distilleries, traditionally known for its country liquor, has made a strategic shift towards premium single malts, with their Indri range leading the sales charts. The company's CEO, Praveen Malviya, anticipates a fourfold increase in sales volume for the current fiscal year.

Other Indian distilleries, such as Amrut Distilleries and John Distilleries, have also garnered international acclaim for their single malts. Amrut Distilleries, in particular, achieved widespread recognition when its whiskey was ranked among the world's best by Jim Murray’s Whisky Bible. These achievements have bolstered the reputation of Indian single malts globally.

While the Indian whiskey market is predominantly dominated by mass-produced, low-priced variants, there is a growing segment of consumers who appreciate the quality and craftsmanship of premium spirits. Indian single malts, with their diverse taste profiles and textures, are gradually gaining traction among discerning drinkers both domestically and abroad.

The outlook for the Indian single malt market appears promising, with significant growth projected in the coming years. Awards and international recognition serve as valuable endorsements for these brands, driving consumer interest and demand. As Indian single malts continue to establish themselves as contenders on the global stage, they represent a unique and prized addition to the world of whiskey.