The rise of premiumisation ft. SOIC
Hi folks, Krishna here. A few weeks ago, I sat down with the good folks at
(Ishmohit and Siddhant) to talk about a word that’s everywhere from presentations to the earnings calls these days: premiumisation.The person who once bought a hatchback now wants an SUV; someone who used to drink plain curd now buys Greek yogurt; the basic toothbrush becomes an electric one. It sounds like people are simply spending more, but it’s really about something deeper: how Indian consumers are evolving, and how aspiration itself is changing shape.
Premiumisation, as Ishmohit put it, is “the aspiration for a better life experience.” It’s not about chasing luxury; it’s about upgrading life in small, deliberate steps, from necessity to comfort, from function to feeling.
Families that once booked budget hotels now prefer four-star hotels because they care about safety and comfort. Mineral water has become “Himalayan” or “alkaline.” Even investing has its own version, from mutual funds to private equity, from fixed deposits to startup portfolios. Each move says the same thing: I want better, because now I can.
You can see this pattern everywhere. A decade ago, hatchbacks made up half of India’s car market and SUVs barely a tenth. Today, that’s flipping. The middle class wants larger cars, sleeker dashboards, ambient lighting, features that once lived in luxury catalogues.
In liquor, the same thing: regular whisky grows 2–3% a year, but Indian single malts and craft spirits are compounding 15–30%. As Siddhant said, “It’s driven by aspiration, but also by confidence. Indians now want to consume their own premium products, not just import them.”
The pattern extends beyond autos and alcohol, into real estate, food, and travel. What’s driving all of this? It’s not just rising salaries; it’s the wealth effect. When asset prices rise (stocks, gold, property), people feel richer. That feeling shows up in what they buy: better homes, better holidays, better brands. This isn’t unprecedented either. When China’s per capita income crossed roughly $2,300, e-commerce spending exploded 30x in eight years, and China became a third of global luxury demand.
India is following a similar arc, just at its own rhythm. You can already see it in the cities. Families that once saved every rupee now spend on experiences, convenience, and time. The playbook’s familiar, but the expression is very Indian.
Technology, of course, accelerates all of this. Progress works like this: what starts as luxury quickly becomes baseline. Flying was once aspirational; now, it’s a low-cost routine. Smartphones that once cost a month’s salary are utilities.
Every time access expands, a new layer of “premium” appears above it. Data became cheap thanks to Jio; now people pay extra for fibre speed and seamless connectivity. Each solved problem creates the next upgrade.
But here’s the twist.
Siddhant pointed out that the fastest-growing retail concept in India today (Zudio) is actually a play against premiumisation. A decade ago, “premium” meant Tommy Hilfiger or CK. Today, that same customer is walking into a Uniqlo or a Zudio, buying solid quality without the markup.
You can see the same shift in jewellery. Lab-grown diamonds (visually identical but 70–80% cheaper) are taking share from traditional players. That’s not down-trading; it’s technology flattening the old hierarchy of value. One consumer is climbing the ladder, another is redrawing it. Both are aspirational, just in different ways.
From an investor’s lens, that duality is where the opportunity lies. Ishmohit summed it up:
“If a consumer-facing business is growing double digits in volumes, you have to study it. Something is happening there.”
Premiumisation shows up in richer product mixes and higher margins. The countertrend shows up in volume-led disruptors. That, to me, was the biggest takeaway from our chat.
Premiumisation isn’t about luxury; it’s about confidence. The confidence to demand better quality, better design, and better experiences. And the anti-premiumisation wave isn’t the opposite; it’s the same confidence expressed differently. The confidence to say, I don’t need to overpay to prove I’ve arrived.
There’s a lot more we spoke about in detail that didn’t even make it into this piece. I hope you enjoy the conversation as much as I did. :)