‘Brands with a strong digital play are scaling up faster’

E-commerce scaled in a big way during the height of the pandemic but service levels dropped. The big players are now focussed on building on the momentum and ensuring that service levels return to what they used to be. They are scaling up their business in everyday essentials like FMCG and fresh products and are entering new categories like pharmaceuticals. As someone said, 2030 is happening in 2020 for e-commerce

Tier-2 and Tier-3 town consumers are now big shoppers on e-commerce sites. This is opening up a completely new customer base and logistics service providers are strengthening their operations to reach more PIN codes. D2C (direct to consumer) brands have also gained a lot of traction and this is enabling brands to gain much deeper insights into consumer requirements and behaviours. We are seeing brands in our portfolio like MamaEarth and Kapiva increasing their D2C sales several times post lockdown.

Consumer brands are attracting strong investor interest. Investors are recognising that brands with a strong digital play are scaling faster and are more capital efficient.

Now, we also have digital native brands that are as large as many traditional offline brands. So a lot of our companies are seeing strong incoming interest from both PE and strategic players and we are confident that, as and when they raise capital, they will do so at attractive valuations.

Healthy India is a big theme and it is playing out in many ways. Consumers want to invest in their wellness on a regular basis. They are looking for ways of tracking their fitness parameters from home and changing what they eat and drink and improving their overall lifestyle to improve their fitness scores. They are buying nutritional supplements and food products which promote wellness.

Clean label products are in demand. Recreational cycling is getting bigger by the month. Yoga and other fitness solution apps are entering many consumer lives.

Brands like YogaBar, Kapiva, Sarva, Frog Bikes, Vahdam Teas are all seeing strong tailwinds from this trend.

@Home is another big consumer trend. Consumers are shopping for products and services which will help them work from home, study from home, work out from home etc. Brands like BoAt audio, Magic Crate, Tasty Tales are witnessing strong growth from this change of consumer habits.

Technologies of different kinds will create sharply better consumer experiences. AI, voice recognition, image recognition, robotics, drones - these could create disruptions through customisation, personalisation and remote delivery of many services and products. We are already seeing start-ups offering interesting solutions using such technologies.

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