Leading brands and retailers in key categories such as footwear, apparel, accessories and beauty are betting big on premiumisation strategy. This move comes as they are raking up higher growth rates in premium over mass segments as Indian consumers are increasingly willing to shell more on value-added products.
In a recent interaction with businessline, Gunjan Shah, MD & CEO, Bata India said premiumisation is among the key growth pillars for the company. “Premium brands such as Hush Puppies are significantly outpacing the overall company growth. We have seen that consumers are willing to shell out even two times more for value-added products that offer comfort and great design. The share of premium products to overall sales has also been growing strongly for us and we expect the premium segment to continue to grow faster than mass segment. So we will continue to focus on the premiumisation strategy backed by solid marketing investments,” he added.
Footwear companies such as Bata are witnessing strong shift towards casualisation and sneakerisation. But footwear is not alone. Take for instance: Shoppers Stop which has identified five categories for its premiumsation bet. On the earnings call last month, Kavindra Mishra, Customer Care Associate,Managing Director and Chief Executive Officer, Shoppers Stop Ltd said that the company is going to “double down” on premiumisation as a strategy. “Growth rate of premium and premium plus categories are far higher than the weighted average growth rate of Shoppers Stop. And in this journey of premiumisation, we have identified 5 categories which are the power categories which include watches, beauty, handbags, footwear and shades,” he added.
Anchit Nayar, Executive Director & Chief Executive Officer-Beauty at FSN E-Commerce Ventures Ltd, which owns Nykaa too pointed out that the company has been witnessing premiumisation of beauty as a key trend. In a recent earnings call, Nayar said that the Indian consumers are expected to evolve and embrace premium and prestige beauty brands as their shopping behaviours becomes more sophisticated. The company is focusing on offering a wide assortment of marquee international brands online as well as through high-quality retail stores across the country as Indian consumers with higher disposable incomes are expected to turn to luxury beauty brands.