When a CEO Tells Half the Story

Last Friday, ET ran a headline that stopped me mid-scroll: "Shortage of competition in Indian market to support Unilever's volume growth: CEO." It came from Fernando Fernandez, Unilever's global CEO, speaking on the Q1/FY27 earnings call. HUL's CFO Srinivas Phatak piled on, calling performance "very high order."

India Inc. nodded. Analysts updated their models. The story moved.

I didn't buy it.

What Fernandez was probably talking about

I'll give him the charitable reading first. He was almost certainly describing something real — local and regional FMCG players in India, particularly in home care and laundry, who can't absorb input cost and packaging inflation the way a multinational with global supply chains can. ET, PTI, and Business Standard all reported him saying there is a 'shortage of local competition in markets like India' due to rising costs. In that narrow, sub-category sense? Probably true. Some of these players have rationalised SKUs, pulled back promotions, or simply exited.

But 'shortage of competition in the Indian market' — that's what became the headline, the investor narrative, the market-wide takeaway. And at that level, it doesn't hold up.

Five things that headline missed

1. Soap: HUL is being chased

Wipro Consumer Care cited Nielsen data in 2025 showing Santoor's share is within a mid-single-digit gap of Lifebuoy's — and that gap has been closing for several years. I find the direction more interesting than the current distance. An 80-year-old brand with national distribution is being credibly challenged for leadership in its own home category. That's not a market thinning of competition. That's the most contested that race has ever been.

The bars above are illustrative — I've kept them relative rather than publishing Wipro's exact Nielsen numbers, which are from a paid dataset. But the direction, a gap that's been closing consistently, is consistent with everything I've read across independent analyst and press sources.

And Santoor is just one of them. HUL's soaps also compete with Godrej Consumer, ITC (four separate brands), P&G, Reckitt, Himalaya, Jyothy Labs, Patanjali, Cholayil, and Beiersdorf's Nivea. That's eleven named challengers before you count the new entrant I'll get to in a moment.

Competitor counts by category, based on Expert Market Research, Markntel Advisors, and company disclosures. I've only counted brands with material distribution — not fringe players.

"An 80-year-old brand with 8 million distribution outlets being credibly challenged for market leadership in its home category is not the behaviour of a market thinning of competition."

2. ITC has been in personal care since 2005

This is the one that frustrates me most when it gets glossed over. Fiama competes with Dove in shower gels and bath bars. Vivel competes with Lux in mid-market soaps. Superia covers the mass soap segments HUL dominates. Engage holds a high-single-digit share of the deodorant market — putting it squarely in the faces of Axe and Rexona. ITC built all of this on the same rural distribution muscle that put its cigarettes in every kirana in India.

Writing ITC off as a biscuit company when assessing HUL's competitive position is a category error. Literally.

Fiama

vs Dove, Lux

Vivel

vs Lux mid-market

Engage

high-single-digit deo share

Savlon

vs Lifebuoy health

Superia

mass soap segments

3. Reliance is on the same shelf, selling to the same consumer

This is the one I think gets the least airtime. Reliance Consumer Products has gone product-for-product against HUL's core home care range. Glimmer at a meaningfully lower price than Lux. Enzo going directly at Surf Excel and Rin across all formats. Dozo versus Vim. HomeGuard versus Domex. Not adjacent categories — the same shelf, the same purchase occasion, the same consumer, distributed through Reliance Retail's 18,000+ stores and roughly 2 million merchant partners.

Brand

Category

HUL rival

How they compete

Glimmer

Beauty soap bars

Lux

Lower price point

Get Real

Natural/herbal soap

Hamam, Ayush

Direct undercut

Puric

Antiseptic soap

Lifebuoy

Same health platform

Enzo

Laundry detergent

Surf Excel, Rin

All formats: powder, liquid, bar

Dozo

Dishwash bars + liquid

Vim

Sachet entry point

HomeGuard

Floor + toilet cleaners

Domex

Pan-India rollout

Toni & Guy

Premium haircare

TRESemmé, Sunsilk

Global rights acquired

RCPL hit ₹22,000 crore in FY26 revenue (Moneycontrol, April 2026). Campa Cola alone crossed ₹4,700 crore — India's fourth-largest CSD player — in under four years (BusinessToday, April 2026). Dismissing Reliance as 'not yet material' is the same argument people made about Jio in 2017.

4. D2C brands have already built a bigger market than HUL's BPC business

This is the number I keep coming back to. Based on HUL's segmental disclosures, I estimate their BPC revenue at roughly ₹22,000 crore. The India D2C beauty and personal care market — per industry research from Coherent Market Insights and the gaurav.imapro India Skincare Market Report — is estimated at around ₹34,000 crore and growing at approximately 36–37% CAGR through 2032. That's already larger than HUL's comparable segment, growing at roughly seven times the rate.

One market intelligence report places Minimalist at around ₹350 crore in revenue and ~25% of the serum category before HUL acquired them for roughly ₹3,000 crore. HUL's own FY25 materials record a decline in skincare and colour cosmetics at precisely the moment Minimalist was ascendant. When the market leader has to buy what it couldn't build, that's competition given a price tag.

Estimates from Coherent Market Insights and the gaurav.imapro India Skincare Market Report 2026, benchmarked against HUL's segmental disclosures. The 7x growth rate differential holds across multiple independent research sources, even if the exact market size is directional.

5. Quick commerce has dissolved HUL's biggest moat

For most of its history, HUL's 8-million-outlet distribution network was its most defensible competitive advantage. A challenger couldn't match it in a decade. Quick commerce has changed the arithmetic completely. Blinkit and Zepto now operate across dozens of Indian cities and handle a large majority of urban e-grocery orders. A D2C brand that lists on both platforms gets metro reach across 30+ cities simultaneously — no distributor appointments, no shelf negotiation, no trade spend. Discovery is now driven by ratings and conversion, not by who built the better cold chain thirty years ago.

HUL has created a dedicated quick commerce and omni-channel organisation — which was mentioned on the same earnings call where management talked about a shortage of local competition. ET separately reported that HUL's q-commerce sales roughly doubled in FY26. I read that as: the infrastructure that supposedly makes competition irrelevant is insufficient for the fastest-growing retail channel in the country.

What HUL's own numbers actually show

The cleanest test of whether competition is easing is pricing power. If you're dominant in a thinning market, you should be able to raise prices above cost inflation without losing volume. Here's what HUL's disclosures show instead.

5-year revenue CAGR

Mid-single digits

Sector growing at multiples of this

Operating margin band

Low-to-mid 20s %

Broadly flat for several years

Home Care pricing, FY26

Negative

In the "winning" category

(These are my calculations from HUL's published annual reports and investor disclosures — treat them as directional, not audited. The qualitative direction is consistent with publicly reported analyst commentary.)

Volume and pricing data from HUL's Q3 and Q4 FY26 press releases, with ET's coverage of FY26 results. Management explicitly cited 'negative price growth' in Home Care from price cuts taken to hold volume. The FY27 price hike is framed as cost recovery on crude-linked inputs — not margin expansion. The pricing line is directional.

HUL cut prices in Home Care to hold volume through FY26, then announced a 2–5% hike for FY27 — explicitly to offset crude-linked cost pressures, not because they could. Margins have been broadly flat in the low-to-mid twenties for several years. Revenue CAGR is in the mid-single digits. This is a company working very hard to hold its position, not one coasting on reduced competition.

"Flat margins, negative pricing in the flagship category, and a revenue growth rate that lags the sector by a wide margin. That is not what a shortage of competition looks like."

The fair version of the story

Fernandez isn't wrong. He's narrow. Some local and regional players — particularly in home care and laundry — are genuinely under input cost pressure, and HUL is picking up some of that slack at the margin, in specific sub-categories. ET, PTI, and Business Standard reported his comments consistently, and the underlying observation is real.

What's also real is that the Indian FMCG competitive landscape in 2026 has more funded, more capable, and more structurally embedded challengers than at any point in the market's history. D2C brands that didn't exist five years ago hold category-leading positions. A conglomerate with ₹22,000 crore in FY26 consumer revenue has entered HUL's core product lines with distribution HUL can't outspend. Quick commerce has rewritten the rules of brand discovery. None of that appears in the headline.

India's FMCG market isn't thinning of competition. It's reorganising — faster than any earnings call narrative can keep up with.

A note on sources

The earnings call quotes are from ET, PTI, and Business Standard's contemporaneous coverage. RCPL revenue and Campa Cola figures are from Moneycontrol and BusinessToday (both April 2026). The D2C market size estimates come from Coherent Market Insights and the gaurav.imapro India Skincare Market Report 2026 — treat these as directional, not audited figures. The soap share chart is illustrative; exact figures are from paid Nielsen data that Wipro Consumer Care cited publicly. HUL's financial metrics are calculated from their own Q3/Q4 FY26 press releases and published annual reports. Competitive landscape counts come from Expert Market Research and Markntel Advisors.

Part two is out Thursday: "The Map They're Not Using: Where India's FMCG Growth Is Actually Coming From" — on the Tier 2/3 consumption wave and who's best positioned to catch it.