For the past decade, the dominant buzzword in Indian retail has been “premiumisation.” Driven by rising disposable incomes and aspirational spending, brands raced to the top of the pyramid. However, a significant recalibration is underway.
As reported by Financial Express, retail giants like Starbucks, Skechers, Domino’s, and Decathlon are shifting gears—moving from premium to mass market to unlock the next phase of growth.
The Knowledge Company Senior Partner, Ankur Bisen, provided expert commentary on this strategic pivot, explaining why brands are rethinking their operating models to adapt to local realities.
The urgency for this shift is best illustrated by Tata Starbucks. While the coffee chain saw a 5% revenue increase to ₹1,277 crore in FY25, its losses widened sharply to ₹135.7 crore.
The dual pressures of exorbitant real estate rentals and a price-sensitive consumer base have made the traditional “premium-only” model difficult to scale profitably beyond the top metros.
Ankur Bisen puts this saturation into perspective:
“Brands like Starbucks have largely saturated the top end, with a presence across 81 cities and about 500 stores. The question now is: what next?”
“As you move down the pyramid, you encounter aspirational but value-conscious consumers. That requires a low-cost model—more accessible price points, simpler menus and functional store formats.”
Starbucks is not alone in this journey. The Financial Express report highlights how other global players have successfully navigated this transition:
This strategic shift is backed by undeniable demographic data. The Indian middle class is the fastest-growing segment, projected to rise from 31% of the population today to 60% by 2047.
For brands, the message is clear: The top of the pyramid offers high margins but limited volume. The middle offers massive scale, but it demands a fundamental restructuring of cost models—from rentals to menu engineering.
As Ankur notes, the future of Indian retail belongs to those who can balance aspiration with accessibility.
Ankur Bisen’s contribution to this discussion exemplifies TKC’s role as a trusted advisor to global and domestic retailers navigating the complexities of the Indian market.
Whether it’s format innovation, pricing strategy, or market entry, our insights are built on decades of experience and deep consumer data.
We work closely with clients to evaluate emerging opportunities through a multi-lens approach—consumer behaviour, infrastructure, margin potential, and operational scalability. As the retail ecosystem evolves, our role is to help brands pivot with precision.
This feature aligns with TKC’s ongoing work in:
At TKC, we believe the future of retail lies in meeting the consumer where they are.
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