Why Indian Consumers are Turning Towards Upcoming Local Brands

Local brands

Along with Nestle’s two-minute Maggi, the category leader, many stores now offer ‘1 To 3 Noodles’ in Karnataka. Besides its stellar penetration of 35% in the state, this local brands caters to local tastes with a desi twist to instant noodles that comes with more masala.

Similarly, North India-based Vasant Masala caters to the specific spice needs with its Awadh Garam Masala. Local brands whose target market is only one state are making headway into retail shelves and consumer homes, if not hearts, with their products.

Local brands are better suited to local tastes

As a result, these brands are bringing value beyond price points by capturing state preferences and establishing relationships with retailers.

Ramamkrishan said that local brands no longer have basic packaging and a brand name. They innovate and have brand ambassadors. Today, local brands are only limited by their presence, not their ambition.

The speed of decision-making in local brands is high, and their agility allows them to capture dynamic trends in shopping habits more quickly.

From pandemic lows to recovery-local brands

In Kantar’s Consumer Connections 2023 report, local brands that had struggled during the pandemic have resurfaced. Over 12 brands have closed shop since they were unable to raise prices during the pandemic. Ramamkrishan adds that many more were unable to source raw materials or to bear the costs during the high inflationary period.

FMCG major HUL admitted in its recent quarterly announcement that regional brands have curtailed the price growth in the sector after the pandemic.

According to HUL’s CEO, Rohit Jawa, the company has seen a dip in market share in the mass segment due to small and regional players. As a result of softening commodity prices – many of whom vacated the market at the peak of inflation – small and regional players have reemerged in certain categories.

Local brands tend to focus on categories with high penetration, such as food and beverage, detergents, spices, washing powders, hair oils, etc. “They won’t be in face washes where the penetration is low,” Ramkrishnan says.

Kantar has selected a few brands such — Reflect Dishwash in Maharashtra, Saras Detergent Bar in Gujarat, Challenge Detergent Bar in Tamil Nadu, Sastry Balms in Andhra Pradesh, Supreme51 in Madhya Pradesh as some of the single-state brands that have exhibited double or even triple digit growth in the last one year, along with extensive penetration in the state of their choice.

Getting to know many brands

It is important to note that consumers are not abandoning national brands either. The complex Indian consumer is more inclined to experiment and Ramkrishnan calls it ‘flirting with multiple brands’.

Kantar reports that Indians make 152 shopping trips in a year, which breaks down to one every 58 hours. This also includes e-commerce shopping.

There are signs of revival, but household consumption levels have not yet returned to normal. However, some people prefer frequent shopping for reasons such as freshness, accessibility, and affordability.

The number of homes that buy over eight brands of biscuits/cookies rose from 24% in 2022 to 34% in 2023, indicating a rise in experimentation. In 2023, 47% of homes bought over three brands of washing powders and liquids, a rise of 6%. And, 43% bought over six brands of soap bars, a rise of over 5%.

Despite rising competition in the sector, experimentation among Indians is also giving a boost to direct-to-consumer brands with national ambitions buoyed by PE and VC investment.

Also Read:

Editorial Director
I'm Shruti Mishra, Editorial Director @Newsblare Media, growing up in the bustling city of New Delhi, I was always fascinated by the power of words. This love for words and storytelling led me to pursue a career in journalism. In this position, I oversee the editorial team and plan out content strategies for our digital news platform. I am constantly seeking new ways to engage readers with thought-provoking and impactful stories.


Leave a Reply

Your email address will not be published. Required fields are marked *