FMCG Upstarts Challenge Giants with Targeted Strategies and Niche Appeal
India’s FMCG landscape is witnessing a shift as nimble startups carve out market share from industry heavyweights by leveraging focused brand positioning, digital agility, and consumer-centric innovation. Emerging players like Honasa Consumer, the parent company of personal care brand Mamaearth, are leading this change—challenging legacy brands such as Hindustan Unilever (HUL) on their home turf.
Honasa’s co-founder, Ghazal Alagh, characterizes the brand’s growth as a result of “innovation, speed, and sharp consumer insight,” particularly among millennial and Gen Z consumers. By specializing in toxin-free, eco-conscious personal care products, Mamaearth has rapidly scaled since its 2016 inception, capturing a niche segment that traditional brands had long overlooked.
This targeted approach is forcing industry titans to recalibrate. In recent years, HUL has expanded its premium and naturals portfolios, launched direct-to-consumer (D2C) initiatives, and invested in digital transformation. However, newer entrants arguably have a native advantage in digital outreach, community engagement, and fast product piloting.
Industry analysts view this as a natural evolution in the FMCG sector, where high differentiation and personalized experiences are becoming key drivers of loyalty. Startups typically begin by addressing narrow consumer needs—be it clean beauty, sustainable packaging, or ingredient transparency—but often use these attributes as stepping stones toward broader category expansion.
According to RedSeer Strategy Consultants, India’s D2C market is expected to reach $60 billion by FY27, growing at a CAGR of 40%. This growth is drawing increased investor attention, providing newer brands with the capital to scale, diversify, and challenge incumbents across multiple product lines.
Yet, the competition is unlikely to follow a zero-sum trajectory. “It’s not about taking share, it’s about expanding the market,” said Alagh. FMCG veterans acknowledge the contribution of these start-ups in growing category penetration and elevating consumer expectations. HUL’s CEO Rohit Jawa even praised challengers for pushing innovation and forcing established firms to become more agile.
As the sector matures, collaboration may also become part of the playbook. Acquisitions and strategic partnerships offer multinationals a pathway to tap into specialized consumer segments while offering