What The Music Industry Doesn’t Talk About Enough: The Merch Economy

Merch has always been more than fabric and ink. For fans, it’s memory and identity; for artists, it’s supposed to be one of the few levers they control in the income stack. In many parts of the world, merch has matured into a business model, not just an afterthought. MIDiA Research projects that the global music merchandise and physical goods market will reach $16.3 billion by 2030, underscoring the growing importance of merchandise to the artist economy. Meanwhile, AtVenu’s 2023 settlement data shows that, on average, small and mid-tier artists generate eight times more in one night’s gross merchandise sales than in an entire year of streaming royalties. That contrast alone explains why global tours are now as strategic about merch tables and online drops as they are about the music itself.

If you want a sense of how powerful this culture can be, look at K-pop. Lightsticks, t-shirts, and collectibles have become billion-dollar drivers for the genre. Fans routinely pay $80 or more for Bluetooth-enabled items that double as both a concert prop and a badge of loyalty. The culture is so ingrained in the zeitgeist that buying official merch isn’t seen as optional; it’s almost part of the ticket price.

In India, merch is still treated more as a novelty than a necessity. Despite a booming live music scene — Reuters reported over 27,000 live events in 2024, a 35 per cent increase year-on-year — artist merch rarely generates meaningful income. The infrastructure is patchy, fan habits are still forming, and the economics are stacked against independents. Yet recent developments hint that this may finally be starting to change.

Take AP Dhillon, who just announced his One of One India tour this December. Along with eight arena-scale dates, his team confirmed that official merchandise will be sold directly alongside tickets. That detail matters because it signals a shift: merch isn’t being treated as a side table in the foyer, but as part of the concert’s business plan. When a star with Dhillon’s cross-border reach embeds merch in the fan journey, it normalizes the practice.

Other artists have tested the waters in their own ways. Prateek Kuhad has long been associated with having a “MERCH” tab on his official site, and past runs included vinyl and apparel via partners like Ambient Inks and The Souled Store. But as of now, his store doesn’t list active products — highlighting just how inconsistent and fragile artist-driven merch ecosystems are in India. Divine, by contrast, tapped into corporate backing. During Budweiser’s Kolkata event, his show featured exclusive Budweiser merchandise as part of the live activation, a brand-backed model that seeded merch culture through sponsorship muscle.

The hip-hop community has also started experimenting. Seedhe Maut has released limited merch runs — including their “Shutdown” T-shirt drop and the Nayaab limited line — which sold out quickly among their fiercely loyal base. These examples prove that when artists lean into merch thoughtfully, fans respond. But the scale is still tiny compared to the revenue the merchandise generates abroad.

So what’s holding India back? Part of it is cultural. Unlike in the West or in K-pop fandoms, Indian listeners aren’t conditioned yet to see buying a ₹1,000–₹1,500 t-shirt as an act of support. For many, it feels like an optional luxury, not an essential part of being a fan. Without that mindset shift, even the most beautifully designed hoodie ends up as deadstock.

The financial realities make it worse. Producing quality merch requires upfront capital — minimum order runs, good fabric, and reliable printing. Independent artists often can’t afford the risk. Price sensitivity means that lowering costs often leads to cheaper quality, which undermines repeat sales. Raise the price to cover margins, and you risk alienating your audience. It’s a lose-lose equation many artists avoid altogether.

Then there’s distribution. E-commerce in India is efficient in metro cities but inconsistent in Tier-2 and Tier-3 towns, where much of today’s fan growth is happening. Handling logistics, returns, and sizing issues is exhausting for small teams. At live shows — the place where merch sells best globally — artist stalls are often sidelined in favor of sponsor activations. And without visibility, merch simply doesn’t move.

But it doesn’t have to stay this way. There are solutions the Indian industry can adopt if it takes merch seriously. Ticketing companies could integrate merch into presales and bundles, turning it into part of the event flow rather than an afterthought. Platforms like The Souled Store, Comet, and Redwolf could develop small-batch, artist-friendly solutions that don’t require big upfront spends. Independent collectives could pool resources to create shared fulfillment hubs for smaller artists, reducing costs. Festivals could mandate dedicated artist merch areas, creating visibility and sales opportunities. And most importantly, artists themselves can reframe the narrative: merch isn’t swag, it’s support. When fans buy a shirt, they’re directly funding the music they want to keep hearing.

The stakes are high. India’s live music economy is expanding at breakneck speed, and brands are pouring money into concerts and festivals. If merch doesn’t evolve alongside it, the country risks leaving a major revenue stream on the table — one that could make the difference between survival and sustainability for independent artists. Until the flywheel turns, merch here will remain what it is today: a space full of creativity and potential, but still waiting for the infrastructure, habits, and industry vision that could turn it into a powerhouse.