Consider this, your friends may come from different income groups but all of them send their kids to school, go for vacations, and drive a vehicle. Functionally, everyone is experiencing the same things. Yet some people make more premium or more affordable choices than others.
What if there was an option to get a premium experience at an affordable price? That’s where ‘mass-premium’ brands come in, they aim to provide a sense of satisfaction and exclusivity of experience, at affordable price points.
What is Mass-Premium?
Formerly known as ‘Masstige’ (a fusion of mass and prestige), mass-premium hinges on two key components:
- “Mass” signifies a broader available market (Total Addressable Market or TAM).
- “Premium” indicates the potential to price products higher within this expansive segment.
This obviously appeals to the VCs and Investors, where the TAM of “mass” gives a large room for growth and the “premium” pricing power of the brand gives push to profitability for the startup.
The Rise of Mass-Premium Startups
We saw the emergence of a lot of startups, particularly in the consumer sector, attacking the “mass-premium” segment. This goes back to India being a “supply-constrained market”, where there is a substantial market at every price point. Added advantage is that the startup in the mass-premium segment need not be a category creator.
Today on PrivateCircle Markets we see a bunch of startups positioning themselves as mass premium and delivering a sense of exclusive, premium and differentiated offering that appeals to the masses in their segment.
Mass-Premium Trail Blazers on PrivateCircle Markets, see if you can identify them
1. 80% of India’s clothing is unbranded and does not provide the premium feel. Imagine having clear design sensibilities, premium branding, quality and easy access to such clothing through an online platform.
Now proof for such mass-premium comes from repeat orders, as this specific founder said “There was fully prepaid order for our 3 premium designs with prices above 5000 each from a place called Adilabad, we had to check where this place was and now we are here to fulfill every tier 2/3 city women aspiring for our premium designs with the online convenience.”
2. A quarter of non-premium hard liquor costs anywhere between ₹120-300 in India. This may suit a market where a plastic glass and water bottle is bought along and consumed within 20 meters of the liquor shop.
Clearly, this is not what the aspiring urban aspiring high income earner is interested in. They want an experience, a story, a brand and a product that caters to their needs of having found themselves a better drink to be satiated.
3. Biryani may be a beaten category to become “mass-premium”, that does not stop a fellow founder from innovating. One can bring in a celebration angle into this every day category. This is possible because of the deeper understanding of the category and understanding palettes that will work and consistently delivering on the brand promise.
When done successfully, some pointers that add to growth in the “mass-premiumization” comes from repeat orders and the brand refusing to do BOGO (Buy One Get One) offers on delivery platforms like Swiggy/Zomato and consistently becoming profitable at an operational level at each new store opening.
Going back to India being a “supply-constrained” market, provides enough and more opportunities for common categories to be premiumized and even then it will most likely not be a “winner takes all”.
Niches, positioning and reach will continue to play their part in helping founders find their price-market-fit. If you would like to meet such founders and invest in their growth, PrivateCircle Markets is open for business.
Join our new take on private market investments: Visit PrivateCircle Markets
