Indians are finally waking up to the local brands and local products as the call for going Atmanirbhar is gaining momentum. Biggest beneficiaries are the local startups. However, it remains to be seen if they will be able to compete against the foregin brands and gain their place in consumer’s mind or not.
Since the opening of the economy, the world has treated India as one big market, suitable to dump their products. But when businesses across the globe suffered in Covid-19 era, Indian government felt the need to become self-reliant. PM Modi’s call to support local businesses got a lot of backing from citizens and quickly turned into a movement. According to a recent BCG report, 60% of Indians now prefer local products despite slightly better international options being available.
India’s leisure startups have been one of the biggest beneficiaries of this 'Vocal for Local' campaign. For instance, athleisure and loungewear is a category that is dominated by international brands. But Label Life founder Preeta Sukhtanka said that they specially launched products in this segment because the demand for Indian athleisure and loungewear shot up very fast. Even in the home decor segment, countrymen have turned towards Indian startups during lockdown as these companies saw a 30% increase in demand from this category. Tier l and Tier ll cities have been big buyers of products like basic clothing and skin care products from these startups.
Local products also come with a stigma attached. They are still considered to be of lesser quality than its western peers. These startups are also working to remove this tag around the domestic products. As most of the customers of these startups are of the age group 20-40 Yrs, a lot of these startups have pushed their social campaigns to remove that taboo attached with local products.
While it is a very compelling proposition, they have their fair share of challenges as well. For starters, these startups are facing liquidity problems as almost all their offline stores are closed. Then there are supply chain and labour problems as well. All in all, if the situation doesn't change, a lot of these startups might not be able to see the year 2021. And if and when all shops reopen, unlike the big international brands, these startups won't be able to give deep discounts.
Key takeaway:
The 'Vocal for Local' campaign couldn’t have come at a better time. With spirits flowing in favor of localisation, the trend seems to be here to stay. So if these companies survive the pandemic, the future holds a lot of promise for them.
With sudden declaration of Atmanirbhar Bharat campaign and the support it received makes it a compelling #Teji outlook for the sector. Growing support for local provides necessary support to local businesses who are struggling to compete against foreign firms despite providing quality product/service.
