(The Weekend Insight) - Why Indian Startups Are Finally Raising Prices. And Winning

In today’s deep-dive, we will examine why India’s startup ecosystem is moving from a ‘sasta wins’ mindset to a premium-first reality. This shift isn’t driven by wealth, but by behaviour - and it’s forcing founders to rethink how products are priced, positioned, and built for the next decade.

In 2015, an Indian startup founder charging ₹1,999 for a face serum would have been laughed out of the room. Investors would have asked who this was for. Consumers would have waited for a discount. And founders themselves would have quietly lowered the price, convinced that India only bought cheap.

In 2025, the opposite is happening.

Founders selling ₹399 products are struggling to survive. Meanwhile, startups selling ₹2,000 skincare, ₹2,500 shirts, ₹999 subscriptions, and ₹199 coffees are scaling faster, retaining better customers, and reporting healthier unit economics. India didn’t suddenly become rich. Something else changed.

This is the story of that change.

For years, India’s startup ecosystem ran on a simple belief: affordability creates scale, and scale eventually creates profits. The logic felt unbreakable. A price-sensitive country needed low prices. Low prices brought users. Users brought funding. Funding would buy time until margins magically appeared.

That belief built giants. But it also trained founders to chase the wrong signals.

Somewhere along the way, Indian consumers began behaving differently. Not loudly. Not ideologically. But consistently. They started choosing fewer things, more carefully. They stopped buying the cheapest option by default. They started paying for products that felt safer, better designed, more reliable, or simply less exhausting to use.

The shift didn’t show up first in income data. It showed up in behaviour.

Nykaa noticed it before most others. The company realised that customers who bought one premium beauty product almost always came back for a second - without needing a discount. These customers explored ingredients, read labels, trusted recommendations, and rarely returned products. Nykaa’s physical stores made this even clearer. Premium brands weren’t niche shelves. They were the core of the business.

The numbers followed the behaviour. Beauty revenue grew over 25% year-on-year. Profits surged. And most importantly, margins improved because trust reduced friction. Consumers weren’t buying luxury. They were buying reassurance.

This pattern repeated itself across India’s beauty ecosystem. Dot & Key leaned into science-backed claims and ingredient transparency, not price wars. It crossed a ₹900 crore GMV run rate within a few years and improved EBITDA margins as pricing power strengthened. Minimalist took an even starker approach - clinical packaging, clear formulations, no exaggerated promises. Within four years, it reached roughly ₹500 crore in annual revenue and was acquired by Hindustan Unilever for nearly ₹3,000 crore.

Large FMCG companies weren’t paying for growth alone. They were paying for proof. Proof that Indian consumers would pay a premium repeatedly if they trusted what they were buying.

Apparel followed the same arc, but with a different emotional trigger.

Snitch didn’t win because it was cheap. It won because it removed guesswork. Better fits. Faster drops. Controlled manufacturing. A clear aesthetic. Its average order value hovered around ₹1,800, repeat rates crossed 40%, and within six years it reached a valuation of roughly ₹2,500 crore. Customers weren’t hunting discounts. They were returning for familiarity.

BlissClub tapped into a quieter insight. Women weren’t looking for cheaper activewear. They were looking for clothing that fit real bodies and real lives. By positioning itself as a lifestyle brand rather than gym wear, BlissClub charged more - and was forgiven for it. When the brand expanded into travel wear, customers followed. Premium pricing became permission to grow.

What made this shift possible at scale wasn’t just aspiration. It was infrastructure.

UPI crossed 13,000 crore transactions in FY24, making digital payments invisible across income bands. Credit card spending crossed ₹1.8 trillion in a single month, with e-commerce dominating usage. Buy-now-pay-later spread rapidly in Tier 2 and Tier 3 cities, separating purchase desire from immediate cash availability.

Consumers didn’t feel richer. They felt freer.

Instead of asking, “Can I afford this?” they began asking, “Is this worth it if I spread the cost?” That psychological shift unlocked premium behaviour far beyond metros.

Quick commerce, often misunderstood as a discount channel, revealed this most starkly. Zepto Cafe and Blinkit Bistro weren’t built to sell cheap snacks. They were built to sell time. Paying extra for immediacy, freshness, and predictability felt rational. Beauty products on quick commerce platforms began showing higher average order values than grocery staples - not impulse buys, but intentional ones.

Time had become a luxury. And Indians were willing to pay for it.

This forced founders to unlearn old playbooks. The race to the lowest price stopped working. Discounts attracted the wrong users. Growth without loyalty became fragile. Startups that survived redesigned their pricing around ladders, not cliffs.

Entry products for sampling. Core products for habit. Premium variants for outcomes or identity. Bundles to raise AOV. Subscriptions to lock in retention.

Nykaa mastered this architecture. Entry-level products sat alongside luxury brands, owned labels, memberships, and physical stores - all reinforcing each other. Customers didn’t churn when discounts faded because they weren’t there for discounts in the first place.

Edtech offers the clearest contrast between old and new logic. Cheap recorded courses flooded the market and collapsed just as quickly. What survived were outcome-driven offerings. upGrad didn’t sell videos. It sold career transitions. Higher prices were justified by placement support and enterprise credibility.

Fintech evolved in parallel. Free apps became funnels. Monetisation shifted to premium plans, wealth products, and credit. Fi Money’s tiered subscriptions nudged users into deeper engagement without alienating price-sensitive segments. Credit cards and BNPL normalised premium consumption by smoothing payment friction.

Distribution changed too. Premium products were no longer discovered in catalogues. They were encountered through creators, routines, and communities. Influencers normalised higher price points by embedding products into everyday life. Quick commerce compressed trial cycles. Sampling became effortless. Retention became the real battlefield

But premium came with its own trap. Many brands mistook packaging for substance. Claims outpaced reality. Influencer spikes masked weak products. India is already seeing premium fatigue - and regulation will accelerate the correction.

We think the next phase will separate decorative premium from real premium. Real premium is built on trust, consistency, service, and repeat behaviour. Decorative premium collapses the moment discounts stop.

India is not abandoning affordability. The mass market will always exist. But growth, margins, and founder wealth are migrating upward - toward startups that understand a simple truth.

Indian consumers are no longer asking who is cheapest. They are asking who is worth staying with.

That is the real price migration shaping India’s startup future.