Saugata Gupta, managing director and CEO of Marico Ltd, sees competition rising from both ends of the spectrum. At the top, D2C brands are making inroads with niche offerings, while at the bottom, regional players have returned after pandemic-induced supply disruptions, reclaiming market share with lower price points.
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“India is becoming a challenging and complex place, but there is growth,” Gupta told Mint in an interaction. “The ability to anticipate risk or an opportunity—and execute with agility and resilience—is becoming a key differentiator.”
The competition is evident in the numbers. In the December quarter, smaller FMCG firms reported a 9.7% jump in year-on-year volumes, more than double the 4.4% growth posted by industry giants, according to data from NielsenIQ. NIQ classifies large players as those with turnover exceeding ₹5,000 crore, while small firms generate around ₹100 crore in annual revenue.
This divide is becoming more pronounced as smaller brands gain traction, forcing industry giants to adapt.
Smaller rivals gain ground
While major companies have responded by strengthening their portfolios and acquiring emerging brands, the broader landscape is far more competitive than it was a decade ago.
Inflation has added to the complexity, pushing up prices on essential items such as cooking oil, soaps, and shampoo, dampening urban demand for packaged goods. Consumers, squeezed by higher costs, have been selective in their spending, weighing everyday purchases against discretionary categories such as travel and dining out.
“Consumption hasn’t fully recovered,” Gupta said, adding that companies must innovate to compete for consumer spending across travel, dining, and other discretionary categories.
The rise of digital-first consumer brands has further intensified the battle. Over the past few years, India has seen an explosion of D2C startups, particularly in beauty, wellness, and nutrition. Initially fueled by venture capital and aggressive digital marketing, many of these brands are now shifting course.
There is enough capital for quality names, but the space has become far more rational, Gupta said. “Direct-to-consumer companies are looking at strategic exits instead of going public or scaling independently, and I think consolidation is likely.”
Marico has positioned itself at the centre of this shift, acquiring emerging brands to expand its portfolio. In 2021, the company took a majority stake in Apcos Naturals, the parent company of Just Herbs, a premium skincare brand. It followed that with a majority acquisition of Plix, a plant-based nutrition company, for ₹369 crore in 2023, and has fully acquired Beardo, a male grooming brand.
While these acquisitions reflect Marico’s focus on premiumization, they also underscore the broader changes in India’s consumer market, where legacy players and digital-first brands are increasingly converging.
The distribution battle
Alongside acquisitions, retail transformation is also shaping the FMCG landscape.
The rise of quick-commerce platforms such as Blinkit, Zepto, and Swiggy Instamart has upended traditional distribution models, making hyperlocal fulfillment a critical battleground for brands. At the same time, general trade—India’s vast network of neighborhood kirana stores—has come under pressure, with profitability challenges and shifting consumer preferences altering the dynamics of the sector.
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To strengthen its distribution, Marico has launched Project Setu, an initiative aimed at increasing direct reach in both urban and rural markets.
“Our direct reach as a percentage of total reach was lower than some of our peers,” Gupta said. “Setu is helping us improve assortment levels in urban stores and expand our presence in high-growth channels such as chemists, cosmetics, and food retail.”
In rural areas, the company is shifting from an indirect to a direct distribution model, ensuring greater control over supply chains and brand visibility.
Marico reported a 15% year-on-year increase in quarterly revenue, reaching ₹2,794 crore in the December quarter, while profit rose 4% to ₹399 crore. India volumes grew 6% year-on-year, signaling resilience in the face of inflationary pressures and shifting consumption patterns.
The broader FMCG sector has seen the growing salience of organized trade and e-commerce, while general trade and small retailers have faced growth and profitability pressures.
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“We’ve been working with the general trade system, our set of distributors and outlets, to ensure a viable system—be it via pricing, addressing channel conflict, or reducing stock,” Gupta said.
