Latest news with #Bain&Company
Time of India
2 hours ago
- Business
- Time of India
VCs love start-ups—But why are they turning away from MSMEs?
Entrepreneurs in India's micro, small and medium enterprises ( MSME ) sector have been facing significant hurdles in accessing capital from traditional banking and institutional sources, primarily due to stringent eligibility criteria, high collateral demands, and complex application procedures. As a result, angel investors and venture capitalists (VCs) have emerged as key alternative options for the sector to address the funding gap. However, the penetration of angel investment and venture capital funds in MSMEs here lags global standards. According to experts and industry players, India's angel investment and venture capital ecosystem is still in its early stages, trailing global benchmarks in size, scope, and maturity. In 2024, less than 5% of India's 63 million MSMEs received equity funding, as per a report by the MSME Ministry . MSMEs in the country, particularly those in manufacturing and services, have been struggling with challenges such as low scalability, low digital penetration, and high-risk perception. With limited access to institutional capital, they primarily depend on self-financing or bank credit to overcome these changes. Amit Mittal, Founder & MD of Chandpur Paper, says India's MSMEs receive very little angel and venture capital finance, while technology-oriented start-ups get most of the investments. In FY24, India's VC funding returned to around $13.7 billion, a 1.4 times surge from the levels of 2023, as investors regained confidence and investments in the technology sector saw a jump, according to a report by global consultancy Bain & Company released earlier this year. Angel investments contributed $500-700 million during this period, but less than 10% went to traditional MSMEs. This highlights a significant funding gap for non-tech businesses. Live Events Echoing Mittal's view, Pushkar Mukewar, CEO & Co-founder of Drip Capital, says the Indian MSMEs face several challenges when seeking institutional or equity capital, including limited financial documentation, lack of formal credit history, low investor awareness about non-tech MSME sectors, and geographical disadvantages. 'Traditional VC or angel investors often see MSMEs as high-risk and low-return due to their fragmented and informal operations.' How the things can get better Jaydeep Birje, CEO of Leo Engineers, also believes that the government's efforts via Startup India, the SIDBI Fund of Funds, and the Credit Guarantee Scheme are slowly pushing the needle. 'Some early-stage investors are also now expanding their scope beyond tech to more inclusive, impact-oriented MSMEs,' says Birje. Mittal emphasises that many MSMEs lack awareness and preparedness for equity funding. To boost access to funding, India needs to foster co-investment models, incentivise MSME-centric investors and develop digital matchmaking platforms. 'Mentorship and outreach in tier II and tier III cities can improve investor readiness. A focused ecosystem approach is essential to channel meaningful capital into this underfunded yet vital sector,' adds Mittal. Arvind Singh, Founder & CEO of Quest OntheFRONTIER, notes that the landscape is evolving, and changes are already underway. 'In 2025, angel investing in India is more structured and accessible than ever, driven by government initiatives like Startup India and the abolition of the Angel Tax (effective April 2025),' says Singh. A section of experts say that investors are now focusing on MSMEs with strong digital foundations, including robust online presence, e-commerce capabilities and technology adoption. This shift is driven by the recognition that digitally mature MSMEs are better positioned to scale and attract further funding. Additionally, the growth of angel networks and platforms has increased access to investors for MSMEs, including those in tier II and tier III cities, experts add. 'Multiple government schemes, such as the Startup India Seed Fund , MUDRA loans, and the Credit Guarantee Fund (CGTMSE), aim to provide MSMEs with access to capital, mentorship, and regulatory relief. The government is also encouraging sector-specific funds and Alternative Investment Fund (AIF) capital deployment into non-tech MSMEs. Exit pathways for VCs have improved, with streamlined M&A approvals and enhanced IPO regulations, increasing liquidity and making it more attractive for investors,' says Singh. According to Arvind Singh, India's MSMEs are poised for better access to angel and venture capital funding in 2025, driven by policy reforms, a thriving investor ecosystem and digital and technological readiness. While challenges remain—especially for non-tech MSMEs and those outside major urban centres—the overall trajectory is strongly positive, he adds. Similarly, Mukewar highlights that non-dilutive financing models are gaining popularity as a means to address the funding gap for MSMEs; options such as supply chain finance, invoice discounting, cash-flow-based lending, and marketplace seller financing are emerging as scalable solutions. 'These models leverage transaction data rather than collateral or credit history, making capital more accessible and relevant for MSMEs focused on exports, trade, or e-commerce. Scaling such fintech-driven models with supportive regulation and wider adoption can unlock meaningful capital access for India's MSMEs,' adds Mukewar. Singh believes there is a need to increase awareness and improve access for MSMEs to various financing options. 'Some countries, like Singapore, set up MSME support centres in the industrial clusters. Second, the government should encourage and incentivise/subsidise the MSMEs to go digital and automate their business processes, leading to the formalisation of their financial operations and also improving productivity,' says Singh. Singh suggests that finance providers, including banks and NBFCs, should leverage digital platforms and data-driven credit assessment tools and reach tier II and tier III cities and rural areas, thereby expanding funding access to MSMEs in underserved regions. This integrated approach can enhance efficiency, fairness, and inclusivity in MSME financing, says Singh.
Campaign ME
14 hours ago
- Business
- Campaign ME
The future of luxury packaging
Packaging in the luxury sector is undergoing a quiet revolution – and it's getting smarter, greener, and more purposeful. A new report from Bain & Company, in collaboration with Fedrigoni Group, the global manufacturer of speciality papers, self-adhesive materials, and RFID (radio-frequency identification tags), reveals that sustainability is no longer a trade-off in the world of high-end packaging – it's becoming a competitive edge. In a compelling forecast, the report, Luxury Packaging: Resolving the Tension Between Creativity and Impact, projects that, within the next three years, more than 30 per cent of all luxury packaging sales are expected to use sustainable solutions. The findings, unveiled today at the 'Explore – Fedrigoni Creative Summit' event, held in Paris, draw on a survey of more than 500 executives across the luxury packaging value chain in Europe, the Middle East and Africa, including designers, suppliers, converters, and leading brands. 'Packaging is evolving from a static container into a dynamic brand touchpoint,' said Claudia D'Arpizio, senior partner and global head of the Fashion and Luxury practice at Bain & Company. 'It's no longer about choosing between beauty and responsibility. Today, you can – and must – deliver both.' From indulgence to innovation Luxury has long been defined by sensory experiences – the feel of a hand-crafted box, the gleam of a bespoke bottle. But as environmental concerns and regulations reshape the industry, luxury brands are now reimagining their packaging not just as a container but as a statement of values. Marco Nespolo, Fedrigoni Group CEO, said: 'Every day, through our close collaboration with brands, designers and converters, we witness the evolution of what luxury truly means: no longer just about aesthetics and exclusivity, but increasingly about responsibility, transparency and positive impact. In this context, packaging becomes a powerful cultural symbol – beauty that reflects values and innovation that embraces sustainability. As manufacturers of premium papers and self-adhesive and RFID materials, our role is to enable this transformation by delivering high-performance, creative and sustainable solutions. Being a true partner means co-developing with our clients an ecosystem where every material choice becomes a strategic, sustainable and narrative touchpoint.' The report emphasises how leading brands are applying the 'four Rs' (reduce, reuse, recycle, recover) with a luxury twist – substituting traditional materials with advanced papers, biodegradable polymers, and even mycelium-based solutions (a sustainable alternative harnessing the root structure of fungi) that feel as exclusive as they are eco-conscious. Slimmer glass bottles and modular packaging designs are also helping brands cut emissions without compromising elegance. Aesthetic meets ethics Rather than restraining creativity, sustainability is unlocking a new frontier for luxury storytelling and customer connection. Packaging is now being viewed not as the end of the journey but the beginning – especially in the digital realm. Think QR codes embedded in boxes that reveal a garment's origin story, smart labels that verify authenticity, and augmented reality overlays that enhance the unboxing experience. At the centre of this digital evolution is the Digital Product Passport (DPP) – a soon-to-be-standard offering full transparency into a product's lifecycle. 'For today's luxury consumer, knowledge is part of the reward,' said D'Arpizio. 'They want to know where something came from, how it was made, and what happens to it next. Packaging is now the portal to that story.' However, integrating sustainability as a core focus requires brands and packaging manufacturers to collaborate more closely in developing innovative and cost-effective alternatives. By engaging early in the process, both parties can align on creative solutions that not only meet environmental goals but also support the overall operating model more efficiently. Reducing packaging weight and volume is seen as a top priority for sustainable supply chains Reducing packaging volume and weight to optimise transport efficiency and minimise trips is viewed as the most significant factor in improving the sustainability of the supply chain, with 43 per cent of respondents to the survey ranking it as their top priority. Promoting reusable packaging to minimise waste and environmental impact, cited by 25 per cent, was the second top priority. Using lightweight, durable materials to prevent damage during transport ranked third, at 17 per cent, while adopting modular and stackable designs for better space and logistics management was selected by 10 per cent. The integration of smart technologies into packaging for real-time tracking and condition monitoring was considered the least significant, with only 5 per cent prioritising it. Regulation as a catalyst, not a constraint Beyond changing consumer expectations, evolving regulations – such as the EU's Corporate Sustainability Reporting Directive and its Packaging and Packaging Waste Regulation – are accelerating the shifts detailed in the report. While regulation remains a central focus in discussions about industry transformation, what stands out prominently from the survey responses is the belief that customers are the true catalysts for change. The survey found half of respondents predicted that sustainable packaging will make up more than 30 per cent of industry sales within three years. The materials are improving, the digital tools are in place, and the customer appetite is growing. Forward-thinking luxury brands are not just adapting to these changes; they're using them to get ahead, the report finds. It suggests that the best-positioned companies are those that invest in material science, redesign supply chains, and work closely with packaging experts to create more meaningful – and more compliant – solutions. The report concludes that the future of luxury packaging isn't just lighter and smarter but increasingly is symbolic of the luxury industry's broader transformation toward transparency, responsibility, and deeper emotional connection.
Business Insider
15 hours ago
- Business
- Business Insider
The luxury market is poised for a big slowdown, but there are some areas where people are still willing to splurge
It's been a rough year for luxury retailers, as economic headwinds have reduced consumer demand, but there are still a few places where people are willing to spend money. Luxury brands could be facing their biggest setback in 15 years, according to a report published by Bain & Company and Italian luxury goods industry association Altagamma on Thursday. In addition to a global trade war, the industry is struggling to adapt to social and cultural changes. Demand in the US and China, the two biggest markets for luxury products, has been slowing. Some legacy companies are facing financial difficulties with debt and restructuring. Another challenge for the luxury market is Gen Z, a demographic with growing skepticism toward luxury goods, according to Bain. This younger generation of consumers prioritizes self-expression and creativity, and the luxury industry will need to successfully adapt its messaging if it wants to woo more Gen Z customers. Bain estimates that spending on personal luxury goods could be on track for a "continued slip." In a worst-case scenario, Bain estimates the market for personal luxury goods could shrink by 5% to 9%. Consumers are still splurging selectively However, that doesn't mean consumers are pulling back everywhere. Luxury experiences outperformed personal goods in the first quarter of 2025, and companies are leaning hard into "beyond product" experiences such as vacations and gourmet restaurants. Luxury hospitality — think White Lotus -esque resorts — is taking off, with this year seeing rising hotel occupancy rates and longer stays. While traditional luxury markets in the US, China, and Europe are stagnating, the Middle East, Latin America, and other parts of Asia are seeing increased demand from consumers seeking high-end tourism experiences. The UAE, Qatar, and Saudi Arabia are leading the charge in this new trend, according to Bain. Consumers are also eager for luxury cruises. Following the trend of increased personalization, they prefer slower, more immersive trips on smaller ships. Yachts and private jets are experiencing a backlog of demand. Fine dining and gourmet food rank high on consumers' radars, and they chase highly curated experiences. Some areas of personal luxury goods are also thriving. Demand for jewelry, apparel, and eyewear has been robust this year for both uber-luxury and aspirational offerings. Fragrances are a top-performing category due to their popularity with Gen Z and "premiumization." Luxury brands are elevating their perfume offerings by making them more exclusive, expensive, and experiential. Bain also identified some categories that haven't been doing so well: watches, leather goods, and footwear. Unless there's more innovation in these products, it's likely they'll continue to see declining demand. As luxury brands adapt to changing consumer preferences, Bain predicts the gap between the industry leaders and laggards will only become more pronounced. Luxury's winners will be the brands that offer the kind of personalization and novelty that convinces even cautious consumers to spend.
Fashion United
18 hours ago
- Business
- Fashion United
Global luxury market risks facing its worst turbulence in 15 years
Paris - The global luxury market was expected to slow down in 2025, hampered by the geopolitical context and economic uncertainties, with the risk of experiencing its worst turbulence in 15 years. However, the long-term outlook remained positive, according to a study by consulting firm Bain & Company. Luxury sales, "sensitive to uncertainty, are under increasing pressure, with luxury consumer confidence being eroded by economic upheaval, geopolitical and trade tensions, currency fluctuations and financial market volatility," the study, published on Thursday, warned. For the authors of this study, carried out in partnership with the Fondazione Altagamma, which brings together the biggest names in Italian luxury, these headwinds could well be the strongest the industry has faced in 15 years. China and the US, the most important markets for the sector, experienced a drop in demand, caused in the US by fluctuations linked to tariffs and in China by the wait-and-see attitude of the middle class, the study estimated. "We are in a rather unusual period of turbulence and volatility, whether economic, geopolitical, etc. Global luxury spending grew significantly after Covid… we are now seeing a return to normal," Joëlle de Montgolfier, director of the luxury division at Bain & Company, told AFP. "There continues to be an appetite for luxury in the world, we are not in a market that is collapsing, far from it," she qualified. Sales down 2 to 5 percent After 1,478 billion euros in 2024, the development of this market could slow down this year, and in particular sales of personal luxury goods (fashion and leather goods, jewellery, watches), which represent about a quarter of the total and could fall by 2 to 5 percent "according to the most probable scenario". "We had a relatively positive outlook in the last quarter of 2024, and unfortunately, the beginning of 2025 came out down," explained de Montgolfier, speaking of "market normalisation". The study considered two other scenarios, deemed less probable: one, optimistic, which would see sales change between -2 and +2 percent, and the other, pessimistic, with a fall in demand and consequently sales decreasing by 5 to 9 percent. "We are in a major phase of doubt about the added value of luxury, its desirability, its ability to convince customers that it is at the right price for what it offers. And luxury itself (the groups in the sector, editor's note) has some doubts when we see this game of musical chairs of creative directors," analysed de Montgolfier. In recent months, several major houses have indeed changed artistic direction, with the arrival of Matthieu Blazy at Chanel, Jonathan Anderson at Dior, Demna at Gucci, and so on. "Everyone knows that they have to renew themselves a little, reintroduce novelty, innovation, etc. But at the same time, now that we've rotated everyone, we don't really know what degree of renewal we're going to end up with," de Montgolfier pointed out. "By the time all the creative and artistic directors are in place, start producing their first collection… it is probably not in the 2025 financial year that we will see the materialisation of these efforts and their conversion in terms of growth," she estimated. In the long term, the Bain & Company/Altgamma study estimated that "the fundamentals and prospects remain good", arguing that over the next five years, more than 300 million new consumers, half of whom are from Generations Z (born between the late 1990s and early 2010s) and Alpha (born after 2010), will enter the market. Combined with a rise in global incomes and intergenerational wealth transfers, the potential luxury clientele should grow, Bain & Company concluded.(AFP) This article was translated to English using an AI tool. FashionUnited uses AI language tools to speed up translating (news) articles and proofread the translations to improve the end result. This saves our human journalists time they can spend doing research and writing original articles. Articles translated with the help of AI are checked and edited by a human desk editor prior to going online. If you have questions or comments about this process email us at info@
Business of Fashion
20 hours ago
- Business
- Business of Fashion
Luxury Sector Will Continue to Slip, Bain Forecasts
Luxury consumption will remain soft for the remainder of 2025 across key categories — particularly leather goods, makeup and watches — as price fatigue and macroeconomic turbulence weigh on consumers, according to the latest forecast from Bain & Company. If current trends continue, the sector will contract 2 percent to 5 percent for the year. While hospitality and experiential luxury continue to grow, physical goods are losing steam in the key markets of the US and China. Demand in Japan is weakening as tourism slows down and the yen regains value. Emerging markets in Latin America (particularly Mexico and Brazil) and the Middle East are growing, though their smaller scale is no match for a sluggish China, where high youth unemployment is dampening consumer sentiment. 'Right now many Chinese feel 'luxury shame' — consumers don't want to be seen wearing visible logos in a moment where GDP growth is softer and causing social tensions,' said Claudia d'Arpizio, head of global fashion and luxury goods at Bain. New government incentives to boost spending in the country could restart consumption, but only closer to the holiday season, d'Arpizio added. There are some bright spots in the industry, notably categories like eyewear, jewellery and beauty — particularly high-end fragrances — that are being fueled by product innovation and new brand entries. D'Arpizio noted that the same brands that outperformed last year are still doing so now. There is also cause for optimism looking further ahead. The second half of 2025 could bring creative revival to the industry as it welcomes a wave of new creative directors at several top brands. 'Many brands are in a risk adverse situation now — there's not a lot of new products. The fall will be a new ignition, when new designers speak. That wave of creativity should show first results at the beginning of 2026,' said d'Arpizio. But in the current macroeconomic climate, the timing of a recovery is hard to predict, d'Arpizio warned. Under one scenario, Bain believes consumption could start rebound in the second half of 2025, in which case the luxury market could contract just 2 percent or even grow as much as 2 percent for the full year. But another scenario has demand sliding even further, causing the sector to contract anywhere from 5 percent to 9 percent. 'Every turbulent headline causes a dip in confidence,' d'Arpizio said. Recapturing Gen-Z Another challenge for the industry is that consumers aren't just feeling priced out, they're emotionally disconnected. Gen-Z continues to trade down to more affordable luxury and experiences, turned off by a lack of creativity, connection and inclusive experiences from many luxury brands. The group also doesn't display wealth the way its predecessors did, preferring to show off 'quality of life and personal choice,' said d'Arpizio. 'There are 50 million fewer customers in luxury compared to before, especially among younger demographics,' she said. While premiumisation works for some categories, like high-end watches, most luxury labels would benefit from a 'high-low' strategy, with both premium products and entry-level offerings that attract new clients. 'A focus on top clients is important but to grow, an inclusion of aspirational, younger customers is key,' said d'Arpizio. 'Growth and resilience come from a balanced strategy. Especially large brands, they need aspirational customers to thrive.' Many brands seem to have forgotten that lesson in recent years, as product prices have surged without an improvement of quality or design, diminishing their value proposition.
