For decades, India’s fast-moving consumer goods (FMCG) industry was built on two powerful advantages — distribution reach and advertising muscle. Companies that controlled retail shelves and television airtime controlled the market. Harsh Mariwala, Chairman, Marico, now believes that this model is now rapidly breaking down.
Speaking at the Citi India Conference 2026, Mariwala said the FMCG major is reshaping itself to build what he described as the largest D2C business in its categories, as digital-native brands, quick commerce and AI fundamentally rewrite the rules of India’s consumer market.
“You cannot build a moat on investment and distribution anymore,” Mariwala said. “The moat now has to be built on better digital marketing and sharper consumer insight.”
His comments reflect a growing reality confronting India’s legacy FMCG giants: The traditional barriers that once protected large consumer companies are weakening as smaller digital-first brands scale nationally through social media, quick-commerce platforms and outsourced logistics networks at a fraction of historical costs.
“Until recently, FMCG was considered the most defensive sector, you needed huge distribution infrastructure and massive advertising spend. We thought we were sitting very high,” Mariwala said.
Rise of insurgent brands
Mariwala was among the most candid corporate leaders at the conference in acknowledging the scale of disruption facing large FMCG companies.
“I call them Insurgent Brands, they are the challengers, and this is the new reality,” he said, referring to the growing number of digital-first brands taking share across beauty, nutrition and personal-care categories.
Industry executives say competitive advantage in FMCG is increasingly moving away from scale and shelf-space dominance towards agility, faster product cycles and sharper consumer insight.
Mariwala said differentiation and identifying categories where companies have a genuine “right to win” had become even more critical in the digital era, where consumer switching costs are lower and new brands emerge rapidly.
He cited Parachute’s small-sachet packs as an example of how strong brands can preserve consumer loyalty even during commodity inflation by limiting absolute price increases for consumers.
Marico’s response
Instead of folding digital brands into traditional FMCG operations, the company created a separate D2C structure with dedicated teams and operating systems designed for faster product launches and rapid experimentation.
“Digital business is very different from traditional business in terms of agility, innovation and speed of response. It has to be managed differently,” he said. “The aspiration is to be the largest D2C company in its categories.”
The shift reflects a broader transformation underway across India’s FMCG sector, where companies built around long product cycles and distributor-led retail networks are redesigning themselves for quick commerce and digital consumption.
Redrawing playbook
Rivals such as Hindustan Unilever, Tata Consumer Products and ITC are also reshaping digital strategies through premium online brands, acquisitions and direct-to-consumer platforms as quick commerce reshapes consumer discovery and buying behaviour.
Mariwala argued that one of the biggest barriers to innovation inside large companies was fear of failure, making experimentation critical in modern FMCG businesses.
“In a company where people are afraid, innovation will not happen,” he said, advocating smaller pilot launches before expensive national rollouts.
He added that innovation increasingly depends on identifying “latent” consumer needs before they become mainstream trends.
The next consumer wave
Mariwala said technology and artificial intelligence are rapidly changing FMCG operations, from sales-force management to marketing economics.
Marico has begun using algorithm-driven sales routing systems to improve field-force productivity and AI-led advertising tools to create localised campaigns at significantly lower costs.
“We can do it for a few lakhs rather than crores,” he said, referring to AI-generated advertising content for smaller markets.
But Mariwala argued the bigger challenge for incumbents was organisational adaptability rather than technology adoption itself.
“The pace of change is unlike anything I have seen in four decades,” he said. “The roadmap has to change every few months, because the world changes every few months.”
He also said aspirational consumer trends in India were increasingly emerging from Asian markets such as Korea rather than only from western markets.
“Consumer trends are no longer coming only from the West,” he said. “If you are not watching Seoul, you are late.”