New-age companies seek growth areas as urban consumption slump grips
new-age companies in sectors such as beauty, wearables, logistics, ecommerce and used-car sales, which are now seeking to ramp up growth by focusing on new areas of business.
Delhivery chief executive Sahil Barua flagged the slowdown in broader consumption, telling analysts during the firm’s earnings call last week that the trend has now trickled to ecommerce. To counter tepid demand, the logistics firm is attempting to chase new growth areas such as quick-commerce, regional and air logistics.
The slump has exposed pain points for multiple new-age beauty brands. Mamaearth posted a loss in its second quarter, even as its stock hit a 52-week low on Monday reacting to the weak results. The Gurugram-based brand, which is undergoing a restructuring of its offline supply chain, said it was clocking slower-than-expected growth and that it needed to recalibrate the strategy for its flagship brand to grow.
“Persistent inflation has impacted urban consumer demand…and as discretionary spends come down, companies will have to compete harder for the share of wallet. This is also likely to spill over across sectors … whether a consumer will spend on food delivery or buy non-essential beauty products or electronics,” a Mumbai-based analyst at a global brokerage firm told ET. “Cash-rich companies will be better positioned in such a scenario to ride it out, as they can try out different things without worrying about margin dilution,” the analyst added.
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