Hindustan Unilever (HUL) is sharpening its focus on high-growth premium segments and volume expansion in its mass-market portfolio, as CEO and Managing Director Priya Nair steers India’s largest FMCG company toward what she calls “market maker” categories. The twin strategy aims to balance premiumisation with mass affordability, supported by soft commodity prices and recent GST cuts that have lowered prices on nearly 40% of HUL’s portfolio.
Since taking charge in August 2025, Nair has pushed for fewer but bigger bets, zeroing in on emerging, niche demand spaces that can scale as consumer aspirations rise. However, analysts suggest that in a low-inflationary environment, HUL may have to strike a delicate balance — either pushing premiumisation to strengthen margins or maintaining affordability to sustain volumes.
Industry experts warn that competition from regional, local, and D2C brands remains intense, particularly as lower inflation helps smaller players remain price-competitive. “While GST and income tax cuts have improved disposable income, consumers are still cautious — focusing on debt repayment, savings, and durable goods purchases,” said G. Chokkalingam, founder of Equinomics Research. “That leaves limited room for FMCG spending, where local brands continue to capture attention.”
A Worldpanel by Numerator study titled Kharcha 3.0 also highlighted shifting household spending patterns toward education and debt repayment, leaving less scope for discretionary FMCG spending.
Despite these challenges, HUL’s management remains confident. The company plans to reinvest savings from improved gross margins into brand-building and innovation to fend off competition. In Q2 FY26, HUL increased its advertising and sales promotion spend by 80 basis points, signaling renewed aggression. “We are committed to investing across the P&L to achieve competitive volume growth,” said CFO Ritesh Tiwari.
Nair emphasized that HUL’s evolution will mirror India’s own transformation. “We are the original market makers of consumer products in India. As consumers become more affluent, we will continue to scale up and prioritise these market-making segments,” she said.
Within personal care, HUL plans to expand categories with low penetration but high growth potential, such as body wash, which currently has just 2% market penetration. The company is also innovating within established brands — for instance, Vaseline recently launched Vaseline Cloud Soft, entering the light moisturiser segment.
HUL’s long-term strategy has always hinged on India’s “secular trend of premiumisation”, where improving incomes drive aspirational consumption even as per-capita FMCG spending remains relatively low at around $53–54. To address this, Nair plans to further segment HUL’s consumer base into “premiumisers” (top-tier), “power spenders” (middle), and “democratisers” (mass market). “We will continuously and radically segment consumers,” she noted.
Backing Nair’s approach, Unilever CEO Fernando Fernandez expressed confidence in India’s medium-term outlook. “India is very well positioned for growth. The GST reform has had a short-term impact, but it’s ultimately positive for 40% of our portfolio, with price reductions of nearly 10%. This will boost demand in the coming quarters,” Fernandez said in a recent earnings call.
With this dual focus on premium expansion and mass-market recovery, HUL is setting the stage for its next phase of growth — balancing aspiration and accessibility in one of the world’s most competitive consumer markets.
