”CONSUMERS TODAY want more than functionality — they want experiences. Buying or selling a car in India is a milestone, not just a transaction,” says Vikram Chopra, CEO of Cars24, a well known e-commerce platform for pre-owned vehicles.

“It’s no longer just about need fulfillment. Buyers are now seeking a psychological connection with what they purchase,” adds Shankar Prasad, CEO of beauty and personal care brand Plum Goodness.

From automobiles to personal care, traditional market leaders are finding themselves outpaced by nimble startups that aren’t just selling products, but also ideas, identities, and lifestyles. A new generation of consumers who value experimentation, personalisation and brand authenticity over decades-old familiarity are driving this shift, and it is this emotional connection, paired with tech-driven convenience that’s helping startups such as Cars24, Wakefit, and Plum Goodness carve out significant market share — often at the expense of legacy players.

Numbers tell the story. According to figures from startup data platform Tracxn, Cars24 clocked a revenue of ₹6,982 crore last fiscal, while Wakefit, known for its sleep and home solutions, reported ₹1,017 crore, and Plum Goodness posted ₹342 crore.

The message is clear: Heritage alone no longer guarantees dominance. In an era defined by quick commerce, premiumisation, and digital-first discovery, startups are not just surviving — they’re thriving, while legacy brands race to reinvent themselves.

Market potential

Chopra recalls the scepticism he had to face while launching the platform. “People asked, ‘Why will anyone buy cars when ride-hailing is everywhere?’ But the reality is, in India, people don’t own cars not because they don’t want to, but because they can’t afford them.” Only 5-7% of households have a car.

New-age consumer startups remain bullish about the market potential, often strengthened by India’s massive and evolving consumer base. This optimism extends to other consumer categories as well. “There are 28 crore men and 25 crore women in India who either shave or trim. We’re far from saturation,” says Deepak Gupta, co-founder, Bombay Shaving Company. “Our focus remains on Tier I, II and III cities, which cover 55% of our market. We won’t expand into Tier IV for at least the next five years.” For startups like Gupta’s, the opportunity lies in deepening penetration within urban and semi-urban centres, where premiumisation and brand-conscious consumption are on the rise.

From an investor’s perspective, the potential is equally compelling. Dipanjan Basu, co-founder and partner at Fireside Ventures, points to India’s consumption-driven economy. “With a GDP growth of 6.5-7%, India will add $2 trillion of new consumption in the next five years. This will be fuelled by 450-500 million online shoppers and themes, including Gen-Z-driven consumption, premiumisation, health and wellness, and the shift from unbranded to branded products.” Basu sees this as fertile ground for startups to scale and for venture capitalists to invest in “innovation and hyper growth.”

The regional expansion of digital platforms further amplifies this opportunity. “With digital reach improving, geographical divides are blurring. Whether it’s Surat, Lucknow, or Bengaluru, consumer behaviour is increasingly homogeneous,” says Prasad. “That’s why 60% of our business comes from beyond the top eight cities.” For startups, this signals not just growth in metros but strong tailwinds from smaller cities, where rising aspirations and digital access are transforming consumption patterns.

Riding the experimentation wave

At the heart of this disruption lies consumer experimentation. “Buyers will continue to experiment, but not blindly. They’ll experiment within the circle of trusted brands they’ve anchored to. The phase of wild experimentation will moderate as authenticity and brand trust take centre stage,” says Prasad.

Startups such as Plum Goodness, Cars24, and Wakefit have thrived by tapping into this trend. Wakefit, which began as a sleep solutions brand, has expanded into home furniture while scaling its omnichannel presence. “Consumers today seek products that combine innovation with value,” says co-founder Chaitanya Ramalingegowda. “Our growth this year has been driven by strategic omnichannel expansion and a deep understanding of evolving consumer needs.”

Quick commerce has further fuelled this experimentation. Meghana Narayan and Shauravi Malik, co-founders of Wholsum Foods, which owns brands such as Slurrp Farm and Mille, highlight how Blinkit, Instamart and the like have reshaped shopping habits. “Quick commerce has matched traditional marketplaces in revenue and contributes 25% of our total sales,” says Narayan. “It’s a game-changer, which shows how consumer habits are shifting towards immediacy without sacrificing quality,” adds Malik.

In fact, quick commerce has levelled the playing field for startups. “With e-commerce, quick commerce, and technology integration, the barriers that existed a decade ago have come down significantly,” says Prasad. Today, quick commerce contributes 15-20% of Plum Goodness’ online revenue.

While quick commerce boosts accessibility, it also enhances brand visibility in an increasingly cluttered market. “The quick commerce revolution, supported by social media and influencers, empowers consumers to access a broader range of products with narratives around differentiation. Legacy brands are taking shortcuts by acquiring startups to gain access to this know-how,” opines Amarjeet Singh Makhija, partner at PwC.

The ultimate playbook

Experimentation is closely tied to premiumisation, another trend reshaping the consumer landscape. From skincare to snacks, consumers are willing to pay more for products that align with their values. “Premiumisation is real and consistent,” says Prasad.

Gupta of Bombay Shaving Company agrees. “Five years ago, men’s grooming was all about shaving and beard trimming. Today, body grooming has grown to 40-45% of the category and commands a premium. That’s where we have the highest right to win.”

Even in the food space, premiumisation is driving growth. “Consumers are thinking harder about what they eat and why,” says Narayan of Wholsum Foods. “There’s a clear shift toward foods that do more — deliver protein, fibre, and essential nutrients for long-term health.”

According to a recent report by consumer intelligence company NielsenIQ, smaller manufacturers or emerging brands are growing faster in the premium and luxury products segment compared to larger industry players. “Market mix, channel diversity, and new entrants will further drive the adoption of premiumisation in the future,” says Roosevelt Dsouza, commercial head, India, NielsenIQ.

Growth vs profitability

While startups continue to scale, the path to profitability remains elusive for many since new-age companies don’t always aim for immediate profits. While Cars24 reported a loss of ₹498 crore in FY24, according to Tracxn data, Wakefit posted ₹15 crore and Plum Goodness ₹84 crore. Tiger Global-backed B2B seafood chain Captain Fresh, also part of Fortune India’s startup list, reported a net loss of ₹229 crore in FY24, a 22% reduction year-on-year. The top line, however, rose to ₹1,422 crore.

“B2C businesses burn a lot of cash as customer acquisition cost is prohibitive,” explains Makhija of PwC. “Most B2C ventures face challenges of raising funds as they have to keep replenishing coffers since losses in the initial phase are substantial. The cost of cloud, marketing, logistics and warehousing are increasing by the day.”

Chopra of Cars24 acknowledges the shift in investor expectations. “The appetite for funding unprofitable businesses hasn’t disappeared, but the bar for proving viability is much higher. Earlier, investors would fund ideas. Now, they fund outcomes.”

The tightening funding landscape has pushed startups to prioritise profitability, alongside growth. Bombay Shaving Company, for instance, recently turned Ebitda positive. “Profitability is essential as you mature as a company,” says Gupta. “When you’re a startup, experimentation is expected. But as you scale, you must operate responsibly.”

Opportunity amid uncertainty

Despite their success, consumer startups face significant challenges. For one, scaling offline remains tough. “As new-age B2C players expand into general trade, their nimbleness fades, and real-time customer feedback diminishes,” warns PwC’s Makhija. “They also face working capital challenges, as general trade isn’t an easy channel to master when you’re not an FMCG giant.”

Legal complexities add another layer of difficulty. “Consumer startups must navigate multiple laws across sectors,” explains advocate Nitin Parihar. “Many early-stage startups, focussed on valuation, overlook corporate structuring, leading to post-investment disputes or deal failures... These gaps often lead to dilution issues and, over time, conflicts among investors.”

Yet, for all the hurdles, the outlook for consumer startups remains bright. According to industry reports, India’s D2C space is projected to become a $300 billion market opportunity by 2030, driven by continued innovation and the emergence of new players.

The larger market trend supports this optimism. The cumulative market cap of 19 new-age tech stocks surged 67% in 2024, from $40.6 billion in 2023, fuelled by improved fundamentals and a broader equity market rally.

In the battle between legacy giants and agile challengers, startups are setting the pace, and legacy brands have no choice but to catch up — or risk being left behind.