NEW DELHI: The fast-moving consumer goods (FMCG) sector is witnessing a notable consumer shift towards newer and regional brands, as buyers increasingly seek value and favour localised offerings, said Honasa Consumer Chairman, CEO, and Co-founder Varun Alagh.
According to Alagh, regional brands are providing stiff competition to large, established players through aggressive pricing strategies and better margins for distributors, factors that are impacting the growth trajectory of traditional FMCG giants.
“Overall, there is a consumer shift happening towards newer and regional brands, as large FMCG companies are not growing as strongly,” Alagh told PTI.
He added that these emerging brands are younger, agile, and more aligned with consumer needs, particularly through vernacular and locally tailored strategies.
Following the June quarter results, several large FMCG firms including Britannia, Dabur, Marico, and Hindustan Unilever (HUL) acknowledged the growing competitive pressure from smaller regional players, especially within certain key product categories.
On the overall industry performance in the June quarter, Alagh described it as “subdued,” with limited volume gains. However, Honasa Consumer, which owns brands like Mamaearth and The Derma Co., bucked the trend.
“In our case, volume growth is ahead of value growth. It’s actually in double digits. So, all of our growth is driven by more consumers buying our products—a much healthier sign,” he said.
Looking ahead, Alagh remains optimistic about Honasa’s performance for the remainder of the financial year.
“We believe that the next three quarters will be better than the first quarter, and we should remain in the double-digit zone for volume growth,” he added.
Industry leaders from other major FMCG players have echoed concerns over increased competition from regional players.
