REDEFINING THE CONSUMER GOODS MARKET

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A look into how startups are breathing energy and ideas into age old industries

If we talk about startups, what are the names that first come to our minds? Probably the names of giant technology companies like Microsoft, Facebook, Amazon, etc. Technology has taken over the world, and it is undeniable that technology and software are indeed a very lucrative scope for most entrepreneurs. This is shown by the exemplary SaaS startups that had pretty humble beginnings are now reaching unimaginable heights. SaaS companies are firms that make use of software to give unique types of services to their customers. These companies have instant and unrestricted access to the global market, and their services also do not require product delivery costs. These companies host and control the software from their head office, and remote users are able to connect to it using their own devices, sometimes requiring to pay a subscription fee for the service.

Suppose, you’re a corporate jobholder at a private firm. Your job probably demands you to perform a wide range of duties and activities that would otherwise have been very challenging to perform if not for software services. Do you need to create an assignment? Microsoft Word is there for you. Need to give a solid presentation that may secure a life-changing promotion? You got PowerPoint. Need to maintain a personal financial record? Just make a spreadsheet on Excel. These are just examples of Microsoft alone. Now imagine that your current laptop does not meet the spec requirements that your latest project on graphic designing requires. You need to purchase a new laptop, but you’re way too busy to go out and purchase one since you’ve been handling the pile of other tasks that have been assigned to you. After all, promotion does not come easy! Thanks to websites like Amazon, you can easily order almost anything and everything and have them delivered to your doorstep, often at a discounted price. And finally, if you face any sort of problems with the assignment while you’re at it, you could simply knock your boss on Facebook to discuss the issue and solve it.

 

 

As of 2021, Gartner predicts that the service-based cloud application industry could very well be worth around 143.7 billion dollars in the coming year. However, in a startup world dominated by SaaS companies, some consumer goods startups have not failed to raise everyone’s eyebrows. They have survived the brutal competition from the SaaS companies and in some cases, risen above them to occupy a significant portion or segment of the global marketplace. It seems like they have cracked the code behind accomplishing tremendous success, gaining public exposure, customer satisfaction, and a loyal consumer base. With the combined efforts of a full-proof business model, efficient production, unmatched display of marketing skills, and well as reliable customer service, these firms are leading the way for budding and potential consumer goods startups. This article talks about some mention-worthy startup companies that have relied upon consumer goods to reach the top.

In the highly competitive contemporary marketplace of today, it is important for companies to “make noise” to stand out from the crowd. The concept of “disruptive marketing” revolves around the practice of being unique. On a continuous basis, brands try to look for new ways of communicating to their target consumer base. When companies like these experiment with new ideas that are capable of winning the respect of everyone, a disruptive brand is created. One fine example of a disruptive brand is Tesla. In the past 2-3 years, Tesla has become a household name. Tesla and its powerful new forms of energy are world-renowned, but what exactly makes Tesla a “disruptive brand”? Well, to put it in straight and simple words, everything that is done by Elon Musk. Their pursuit of upgraded technology and sustainability is what makes them stand out. Tesla is not the best car manufacturer on “Earth”, it quite probably is the best in the solar system since they have also started sending vehicles into space too! They are broadening the horizons of what vehicles are capable of.

Although a lot of people might disagree with Tesla being an example of disruptive branding as seen previously, due to its “high-end” backing. However, the fact still stands that the revolution that Tesla has brought to the automotive industry is unquestionable. Additionally, Tesla possesses open-source patents, meaning that they would be open for use by anyone and everyone. This is massive, considering most successful companies are often very restrictive and maintain secrecy about their engineering achievements, keeping them under maximum surveillance. In the past year, Tesla’s stock prices rose over 700%, which is massive. Currently, Tesla’s stocks are worth $615 each. However, one analyst predicts that by 2025 each of them will be worth $3000, gaining an increase in value of about 350%. Although that sounds like making empires on the clouds, here we are talking about a company that has made more than a 700% gain in share price over a year.
Other honorable mentions of consumer goods startups include Smarter, Purple, Brewdog, Aldi, Bioo, Hippyfeet, Spira, and Warby Parker. Smarter is a company that was the pioneer in bringing the industry innovation of IoT or the “Internet of Things” to the consumer market. Co-founders Isabella and Christian Lane, in 2013, designed their own Wi-Fi-connected kettle. The idea was to enable the user to have everything they need for a cup of tea ready prior to them even arriving back home. The firm has since gone into expansion, adding products like a fridge camera whose purpose is to let you order food directly to your home depending on what you have currently stored in your fridge.

Purple is a disruptive brand that completely turned the waves for the rather “lowkey” mattress industry, where companies prefer to operate in a safe zone and not experiment too much with the basics. Co-Founders and brothers Terry and Tony Pearce innovated a high-tech mattress that provides unrivaled back support within its class and launched it into the market for a price that almost anyone can afford. Although the product itself is disruptive enough, it is Purple’s business model that makes the company stand out. Purple chooses to cut intermediaries off and market their products directly to their consumers, meaning all the hassle and extra costs associated with distributors, wholesalers, and retailers are avoided. They even offer a 100-night refund option, where you may take the mattress home, give it a trial and even if you feel dissatisfied on the 99th day, you could ask for a refund and have your money back!

Taking a cut from all these serious talks, let’s look into how free thinkers are disrupting industries that have been perceived to be ‘ordinary’. BrewDog is a very familiar name in the alcoholic drink industry and is one of the most disruptive brands in it too. The brand is disruptive, not for its product (which is great) but the approach it took to market them. They take the art of making craft beer very seriously and aim to revolutionize people’s beer-drinking habits. They wish to make people passionate about drinking craft beer as much as they are passionate about making it. Speaking of beer, some of them can be found in grocery stores too, which brings us to our final exemplary disruptive brand, Aldi. Aldi quite simply demolished the traditional ideology of what can be done with grocery shopping and carved out its own concept of it. Although it is not the most popular grocery store out there, Aldi captured a good portion of the British market with their generally high-quality items at fairly low prices. Moreover, Aldi also was the pioneering company in Britain to boycott plastic bags and work towards a more sustainable future. Therefore, not only is Aldo pocket friendly, they are eco-friendly too!

However, consumer goods companies these days are looking to expand their horizons. The recent update of consumer goods companies is that they are seeking to invest in high-growth potential startups as a means of increasing their growth. As suggested by various investors and industry executives, fast-moving consumer goods (FMCG) firms and retailers such as Haldiram’s, Wipro Consumer Care and Lighting Ltd, Burman Family Holdings, Dabur India and LuLu Group are all searching for consumer brand startups suitable for investment in order to boost growth in a rather poor economy. The sharp fall in the last few quarters across the fast-moving consumer goods and consumer packaged goods segment has led to this outcome. According to Wipro’s spokesperson, they have launched a venture fund to invest in startups in the consumer brands space. When asked to give more details, he explained the firm will be investing around 10 to 30 crore Indian Rupees (which roughly adds up to 1.36 to 4.1 million USD) in early to mid-stage startups. He was quoted saying, “We will be looking at these startups where we can add value as well as learn from them. Financial returns would be an important objective of the fund as well as adding strategic value, but all as a minority investor”. On the other hand, Haldiram, a highly renowned packaged food firm in India is discussing investment plans with several startups including a Bengaluru-based quick-service restaurant (QSR) named Frozen Bottle that primarily sells milkshakes and desserts. Therefore, although SaaS firms are doing great, the consumer goods startups aren’t any less either. The current situation for many of these brands is rock-solid, and the future only seems to be more promising.

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