Premiumisation may be the preferred go-to-market strategy for many consumer companies in India, as rising aspirations and higher disposable incomes fuel growth at the top end. But a growing set of retailers is taking the reverse route—shifting from premium to mass—as the need to expand and adapt to local market realities forces a rethink. Brands such as Skechers, Domino’s, Decathlon and Starbucks are among those recalibrating their strategies, industry experts told FE.
Tata Group-run Starbucks is the latest global brand to explore a lower-cost operating model in India, seeking to address the country’s price-sensitive yet aspirational consumers, high rentals and uneven demand trends.
In FY25, Starbucks’ revenue from operations rose 5% year-on-year to ₹1,277 crore, but losses widened sharply to ₹135.7 crore, with half borne by its Indian partner. In FY24, the company had reported a loss of ₹82 crore on revenue of ₹1,218 crore.
Starbucks Paradox
An email sent to Tata Consumer Products, Starbucks’ Indian partner in the 50:50 joint venture Tata Starbucks, remained unanswered until press time.
Retail and management experts say the pivot reflects the need to participate in the larger growth opportunity at the lower end of the market. “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?” said Ankur Bisen, senior partner and head of retail, consumer products and food at The Knowledge Company (formerly Technopak Advisors).
“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,” he added.
Other global brands have already made similar adjustments. US footwear retailer Skechers, which entered India in 2015 with a comfort-first proposition and entry-level prices above ₹4,000, has progressively lowered price points. In recent years, entry-level collections have dropped to under ₹1,000–2,000, reflecting strong demand at the mass end. The brand now clocks sales of over ₹1,700 crore in India, which ranks among its top global markets.
Domino’s and Decathlon offer parallel examples of India-centric reinvention. Both redefined fast food and sports retailing by tailoring products, formats and pricing to local tastes. Decathlon is targeting a doubling of sales from about ₹4,000 crore over the next five years, expanding its footprint to over 90 cities from 55 currently. Domino’s, India’s largest pizza chain with more than 2,000 outlets, is aiming to scale up to 3,000 stores within the next two years.
“A low-cost model can also help brands like Tata Starbucks offset high rentals in prime locations, cut losses and scale faster across markets,” said Gulam Zia, executive director at Knight Frank India. This, he added, is especially critical as the retail sector emerges from a prolonged slowdown and value-conscious consumers return to the market, aided by monetary, fiscal and tax reforms such as GST 2.0.
Scaling the Pyramid
Demographic trends further reinforce the shift. According to a study by People Research on India’s Consumer Economy (PRICE), the middle class is the fastest-growing major segment of India’s population, expanding at an annual rate of 6.3% and adding 338 million people between 1995 and 2021. It now accounts for 31% of the population and is projected to rise to 38% by 2031 and nearly 60% by 2047.
