A deep dive into the report

AI and Omni-Channel

“AI, tiered expansion, and omnichannel models are no longer future bets—they’re foundational to execution today. What stands out is how early-stage startups are applying these levers with surprising sophistication.” Said Himanshu Bajaj, Managing Director & Head – Alvarez & Marsal India and GCC

Unsurprisingly, AI is used by most brands for marketing. 87% of AI adopters reported that by using AI, there was a 30% improvement in customer acquisition cost. 

The report suggested that omnichannel is the only way to go: 67% startups have made a presence both offline and online.

The journey almost always starts with brands investing in digital ads and running campaigns to create awareness of the existence of the brand and their product or services, and later investing in physical stores so that the consumer can have a touch-and-feel of the product.

As it is no surprise, 70% of Indian consumers shop through various omnichannels. 

Global and Local

“India’s next billion consumers are not waiting to catch up – they’re leapfrogging. In Tier 2/3 markets, relevance isn’t about scaling down your offering; it’s about showing up with empathy, accessibility, and trust.” Said Swagat Sarangi, Co-Founder, Smytten.

Many startups are going global and local: The aspirations of the untapped tier 2 and tier 3 cities are rising, and many players are ready to tap into this field.

There was a +19% increase in the total income of tier 2 cities, which showcases that with rising incomes, people will demand more premium services and products.

There are over 52% startups that are expanding cross-border in the US, UK and UAE. The reason is that there is a great hunger and aspiration from a large number of people towards buying Indian origin products.

Category Creation and Creator-led Brands

“Influencer marketing has been a core pillar of our growth. For us, content isn’t just a piece of the puzzle – it is the puzzle. Working with creators allows us to tell real, relatable stories that build trust and emotional resonance.”

Undoubtedly, creator-led brand building is seen as extremely powerful as it increases trust and reliability. Over 88% brands are collaborating with influencers and celebrities to enhance storytelling, because everyone knows by now: Storytelling and Emotions are the cornerstone of selling a product.

The report found that 84% of startups have already expanded beyond their initial product categories. For instance, a company that starts with headphones may later venture into smartwatches, eyewear, or even nanotech-based accessories.

Looking ahead, 65% of startups plan to diversify further within the next three years. This approach allows them to serve a broader customer base, deepen market penetration, and stay relevant in a competitive landscape.