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The Collection Wed, 10 Sep 25 |
Multiple stories, multiple perspectives, one theme worth your time—every week. |
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Last week, I came across an interesting report on what is probably the most hyped segment in India’s FMCG landscape.
The report, released by Worldpanel by Numerator (one of consumer data tracker Kantar’s units) shows that premiumisation hasn’t just been confined to India’s more urban markets. In fact, in some categories, rural India’s contribution to premium goods sales have actually beaten the urban segment.
According to Worldpanel, in the “Super Premium” category—i.e., products priced over 50% more than average—rural India’s volume contribution has risen from 30% to 42% in the last five years. In “Affordable Premium”—with prices 21%–50% over average—the rural market now contributes more than half the volumes.
One way FMCG manufacturers have done this is by tweaking the size of packs they offer in their premium product lines, as illustrated by the chart below.
Of course, we’ve already written several stories about the steady premiumisation of category after category over the last few years. With overall market sentiment remaining muted, companies have had little choice but to eke out more from consumers at the top of the pyramid. In fact, last month, credit ratings agency Careedge forecast that growth in overall private consumption in FY26 would be even lower than FY25, at just 6.2% year-on-year.
So I thought I’d take this chance to showcase a few of our must-reads on premiumisation, and how the trend has and is playing out in India.
The most recent one is a sprawling, insight-packed interview my colleague Seetharaman did with Sudhir Sitapati, the CEO of Godrej Consumer Products, who says that he’s increasingly focusing the company’s efforts on the upper echelon of the consumer base—especially in products such as pet food and laundry liquids.
Godrej Consumer’s Sudhir Sitapati on selling to India’s top 20% during a demand slump
Changes are afoot in not just what the FMCG major sells, but also how. Smart TVs offer a clue
Speaking of premium detergents, there’s another company which has made them a crucial part of its offerings—and a powerful engine for its business.
Hindustan Unilever’s detergent-powered decade
Brands such as Surf Excel and Rin have helped the home-care vertical’s profits surge over 7X since 2012
Even century-old brands have left habit and tradition behind to jump on the premium bandwagon. In 2023, we wrote about Dabur’s bid to reinvent itself and become more relevant to young, affluent consumers, without losing its core audiences.
Dabur seeks Gen Z approval to shed boomer image
In its new avatar, the company that has so far focused on mass brands plans to increase premium offerings—all to lure younger consumers
But climbing up that ladder can be quite a challenge for legacy brands known for their mass-market appeal. Just ask Bata.
Its sales have barely grown in recent quarters, and its gross profit margin of ~58% is the same it was three years ago. Why hasn’t Bata been able to make headway in the premium category like its rival Metro Brands has? We explore in this piece below.
Bata just can’t break free
A company once synonymous with footwear for the middle class is fast losing its identity
And to wrap things up, there seem to be rumblings in the premium apparel segment, with Tata-owned Trent reducing its stake in the joint venture through which it operates international brand Zara.
Now, the Tatas are considering upgrading Westside to a premium-apparel outlet, while planning to launch a new segment targeting mid-premium users, according to two industry executives who did not want to be named. Essentially, the new segment would cater to Westside’s current target consumers. And the upgraded Westside would go on to compete against the likes of Zara and H&M.
It seems like the Tatas are inching Zara out.
Read Aakriti Bhalla’s story from May to understand why.
Zara taught Zudio how to outdo Zara
Trent-owned Zudio has used the Spanish fast-fashion giant’s playbook to reach such great heights that it makes Zara look quite ordinary
That’s all for this week’s edition of The Collection. If you have any thoughts, feedback, or suggestions, feel free to write to me at [email protected].
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Rahul leads the promotion and distribution efforts for the journalism produced by The Ken. He works at the intersection of the publication's editorial and business operations.
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