BT MindRush: Success in D2C biz is very different than in traditional FMCG, says Harsh Mariwala

Harsh Mariwala, one of the most successful entrepreneurs from the pre-liberalised era, has had his fair share of glory as he tided over the tumultuous years of battles in the rapidly growing fast-moving consumer goods (FMCG) market in the 1990s and 2000s. With his empire now in safe hands and him parting with the day-to-day operations, the Chairman of homegrown major Marico Ltd. continues to remain as excited about new market opportunities as ever. Speaking at the Business Today Mindrush 2025 in Mumbai, Mariwala stresses the need for success in the fast-emerging D2C space, the importance of talent, and the changing landscape.

“Until four to five years back, this [FMCG] was the most defensive sector. It was very difficult for a new entrant to create brands, with so much distribution network. One had to be available in something like 10 lakh outlets. Moreover, you needed big budgets to promote your brands until digital marketing came in neither you had to distribute to retail shops,” Mariwala explains, adding that the wide accessibility of digital space has resulted in a spurt in D2C (direct-to-consumer) brands in last few years. “From some 30 odd brands, now we have more than 200 D2C brands in the market”, he says.

While such disruptions are considered threats for existing businesses, Mariwala looked for new opportunities. “So we thought can we buy D2C brands and that’s why we have been the most aggressive among FMCG companies to buy four brands which will do a turnover of Rs 1,000 crore next year,” he says. As succeeding with a D2C brand is very different than a traditional FMCG brand, they have been kept at different location. Marico’s success with its D2C brands is reflected in the fact that their profitability is much higher than most other D2C brands, he says.

According to him, one of his key to success over the decades has been the talent that hired and the learnings that he obtained from his people. “I started working at a very young age. I am a graduate and wasn’t bright enough to go to a management school. I joined the family business and transformed it from an unbranded to a branded business. I wanted to learn a lot and most of the learnings that I got from the latent that I hired,” says Mariwala. Thus, he explains, his primary focus was on promoting talent - a bet that “paid off” well.

According to Mariwala, the importance of securing the best talent possible for one’s business is as crucial as gaining market share and imparting growth. “I tell other entrepreneurs that there is a big war for latent and that war is as important as market share or growth. You have to create a strong employee value proposition if you want to succeed in business. Because you may have a very good idea but with a weak talent [pool] you will not be able to excuse [your plan],” he asserts. 

Mariwala, who has established a strong Indian fast-moving consumer goods (FMCG) business amid the onslaught of giant foreign multinationals in the space, once turned the table on Hindustan Unilever (HUL) in the haircare market.

Recalling one of the fiercely fought battles in the early 2000s with FMCG major HUL [local subsidiary of Anglo-Dutch FMCG giant Unilever] tells the audience how HUL had attempted to acquire Marico. “They had already acquired two brands in the market and Levers (HUL’s preceding entity) wanted to acquire us. They made it public that they were going to take us on. They announced it in their analysts' meeting, spreading a lot of word. There was a lot of fear - within me and the organization. But I was very clear that I was not going to sell out,” he recalls. “Many approaches were made to me through bankers. We got a direct phone call from the chairman of Levers for the buyout, otherwise, you are history. If you sell off all your future generations will be taken care of. And I said I am not after money,” he adds.