The rise of Microbrands during COVID

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With the growth of e-commerce, microbrands evolved steadily. They are basically Native Digital and Direct-to-Consumer products.

The 24th of March 2020 will go down in history as the day the nation went lockout, disrupting so much of the world that we take for granted, both individually and professionally. Among the many consequences of this is the shift in our market basket, now stripped to the basics and likely to remain this way for some time – as per the new ‘State of consumer tracker’ tracker from Deloitte.

Microbrands are distinct from brands like Niche. They are basically National Digital and Direct-to-Consumer products. By design, speciality brands target a well-defined customer category which is not usually the market’s conventional category such as Harley-Davidson or Canon.

With the growth of e-commerce, microbrands expanded slowly. Nielsen reported the major food and beverage firms on the U.S. market, responsible for 45 per cent segment revenue just drove 3 per cent of the industry’s overall growth from 2011-2015. The long tail of 20,000 businesses, of which microbrands are a core part, has guided 50 per cent growth in the segment.

While the share of microbrands has remained low in India, the current requirement will accelerate growth, which is likely to maintain the COVID impact duration.

An increasing community of next-generation entrepreneurs who are not solely motivated by the profit motive, better access to capital, and digitally driven manufacturing, production, and marketing environments are inspiring new micro-brands to launch daily. On the demand side, the 400 million-plus Millennial and Gen Z customers favour labels that offer what we want to call the latest 3 ‘P’s – 1) Customized placements 2) Digitally Marketed Beyond Benefit 3) digital promotion

WOW shampoos success is a perfect example of the microbrand’s influence. Launched as a digitally first brand less than 5 years ago, WOW shampoos today is the number #1 selling shampoo on Amazon in India and the US, growing on the basis of gleaming user feedback. The primary ingredient in this success story is their contribution to the use of parabens-free, sulphate-free, colour-based products.

The brand capitalized on increasing demand at affordable price points for organic, chemical-free goods. Their business story has further validated their company narrative through procurement strategies focused around sustainable production, small production and a largely female labour force.

The brand capitalized on increasing demand at affordable price points for organic, chemical-free products. Their business story has further validated their company narrative through procurement strategies focused around sustainable production, small production and a largely female labour force.

The recent spike in online sales caused by COVID and the growing dependence on the internet and social media to explore new products will provide the ideal breeding ground for microbrands. Their low inventory and asset-light model makes them quick at a time when big, existing companies are dealing with delays in the production & supply chain.

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