Petcare, travel, health: Discretionary spending could unlock $50 bn opportunity for new-age brands

New Delhi: New-age brands in India could unlock a $50 billion market capitalization by 2030 as households expand their spending pool to include discretionary products, according to a report by venture capital firm Elevation Capital.

India’s rising online consumer spending is estimated to more than double to $300 billion by 2030 from $140 billion now, aiding the growth of new-age brands, according to the report.

“The combined revenue of new-age consumer brands tracked by Elevation has crossed $5 billion or   ₹40,000 crore, a figure that continues to scale rapidly,” according to a report released Wednesday.

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Deepening e-commerce penetration, lowering cost barriers and internet access before discretionary income are enablers now converging to make brand-building both lucrative and exciting for entrepreneurs, it added. 

“As a consequence of the above, Elevation sees $50 billion of public market cap to be contributed by new-age brands in discretionary categories by 2030,” the report said.

India’s market for consumer goods has historically been dominated by large multinationals and homegrown consumer goods makers. However, the market dynamics have changed over the last couple of years as new-age consumer brands find favor among shoppers. 

Pointing to the industries that hold great potential, the report said pet care has a $7 billion opportunity, premium leisure travel $20 billion, and premium healthcare a $10 billion opportunity.

Discretionary spending

The top five million households, constituting approximately 2% of India's population, are expected to expand their spending pool to $100 billion for discretionary expenditures annually over the next decade, up from the current $40 billion. 

"Over the next decade, this spending pool will expand to $100 billion as their incomes grow. For founders building in this space, a fail-fast, one-size-fits-all mantra will not work; instead, they should focus on consumers’ unique needs and premium quality, all built on trust," it said.

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The assumption that there are no whitespaces left in consumer marketplaces and that every nook and cranny has been filled—be it food, travel, or e-commerce—is misplaced. "A major axis where there is room for builders to disrupt would be complex categories that conventional online marketplaces have not adequately served,” it added.

“Of late, India’s startup ecosystem has started questioning the viability of delivering new high-quality businesses in the consumer tech space. With all our conviction, we say yes, these businesses can be built,” said Mukul Arora, co-managing partner and Mayank Khanduja, partner, who leads Elevation’s consumer tech investments.