MSME Briefing Bureau
HUL’s strategic reset offers MSME founders a lesson in disciplined focus
When a market changes, the biggest danger is not losing customers; it is continuing to serve yesterday’s customer with yesterday’s strategy. Hindustan Unilever’s recent performance offers MSME founders a useful lesson. The point is not that a new CEO magically transformed a giant company. It is that HUL made sharper choices about whom to serve, where to reach them, what to invest in and, crucially, what to stop spreading resources across—and why those choices matter.
The Problem Was Not the Market. It Was the Fit.
For several years, HUL faced a challenge familiar to many Indian businesses: the market was changing faster than the strategy.
Consumers were becoming more fragmented. Some were willing to pay for premium products. Others remained highly price-sensitive. A growing segment wanted products that were contemporary, convenient and digitally discoverable.
The answer was not simply to sell more. It was to become more precise about whom HUL wanted to serve, what it offered them and how it reached them.
That is where the strategic reset becomes interesting for an MSME founder.
Priya Nair became HUL’s Managing Director and CEO on 1 August 2025, becoming the company’s first woman to hold the position. By the March 2026 quarter, HUL reported 7% underlying sales growth and 6% underlying volume growth, its highest growth in 12 quarters.
The numbers matter. But the choices behind the numbers matter more.
1. Stop Selling to Everyone
One of HUL’s clearest strategic moves was radical consumer segmentation.
Its FY26 presentation explicitly identified three groups:
- Power Spenders — consumers with greater spending power and appetite for premium and convenience.
- Premiumisers — consumers willing to pay more for better quality or experience.
- Democratisers — consumers seeking quality at an affordable price.
This sounds obvious. Yet many MSMEs still operate differently.
A manufacturer may have 20 customers and treat all 20 in almost exactly the same way. But one buyer may value price, another quality, another delivery reliability, and another may be looking for engineering support or product customisation.
The lesson is simple:
Do not segment customers only by geography or turnover. Segment them by what they value.
Once that is clear, product specifications, service levels, pricing and even salespeople can be designed differently.
2. Refresh the Business Without Destroying Its Identity
HUL did not abandon its established brands. Instead, it worked on modernising relevance.
Its FY26 strategy emphasised creating modern, desirable brands, strengthening distinctiveness and scaling large brands. It also expanded premium and wellbeing offerings. The company reported a four-fold expansion of its Masstige & Wellbeing portfolio, while its Beauty & Wellbeing segment delivered 6% underlying sales growth for FY26.
For an MSME, this is an important distinction.
Relevance does not always require reinvention.
A 25-year-old engineering company does not necessarily need a new name, logo or factory.
It may need:
better packaging of its capability, a sharper product proposition, improved documentation, digital visibility, faster response and a clearer reason for customers to choose it.
Your history can remain an asset while your market proposition evolves.
3. Go Where the Customer Has Moved
Perhaps the most practical lesson is distribution.
HUL created a dedicated quick-commerce organisation, strengthened omni-channel capabilities and increased its direct store coverage by approximately 2 lakh stores in FY26. Its FY26 presentation also reported more than 25% turnover growth in e-commerce.
The underlying principle is bigger than FMCG:
Do not make customers adapt to your distribution model. Adapt your business to the way customers now buy.
For an MSME, this does not necessarily mean joining every marketplace.
It could mean:
- accepting enquiries through WhatsApp;
- creating a professional digital catalogue;
- developing an online B2B enquiry system;
- working with specialised distributors;
- reaching niche buyers directly;
- or creating channel-specific product configurations.
The question founders should ask is not, “Where have we always sold?”
It is:
“Where are our customers buying today?”
4. Put Serious Money Behind Fewer Bets
This may be the most important lesson of all.
HUL’s FY26 presentation explicitly says it is “doubling down on fewer, bigger bets.” It committed ₹2,000 crore in capex towards premium formats and spent more than ₹3,500 crore on the acquisition of Minimalist and the remaining stake in OZiva.
That does not mean an MSME should imitate HUL’s spending.
It means founders should imitate its capital discipline.
If a company has ₹2 crore available for growth, spreading it across ten unrelated initiatives may create ten incomplete projects.
But choosing two or three priorities can create meaningful capability.
Ask:
Which three investments can materially change our business over the next three to five years?
It could be a new production line, automation, product development, export certification, design capability, a stronger sales team or a new distribution channel.
Focus is not about doing less. It is about making fewer things matter more.
The Numbers Show What Focus Can Produce
HUL’s March 2026 quarter provides evidence that the strategic changes were accompanied by stronger performance.
The company reported:
- ₹16,207 crore consolidated turnover, up 8% year-on-year;
- 7% underlying sales growth;
- 6% underlying volume growth;
- ₹3,002 crore reported PAT, up 20%;
- and 23.7% EBITDA margin.
Importantly, the company said the 20% PAT increase included proceeds from the divestment of its stake in Nutritionalab, so the profit number should not be interpreted as purely operational improvement.
That distinction is important for MSME founders too.
Good strategy requires honest reading of numbers, not celebration of every headline number.
What Should an MSME Founder Do Monday Morning?
Do not copy HUL’s products. Copy the thinking.
Take your top 20 customers and classify them by what they actually value.
Then ask:
Which customers are growing?
Which customers are becoming more demanding?
Which customers will pay for better value?
Which products are losing relevance?
Where are new customers discovering suppliers?
Which three investments could change the business materially?
And finally:
What are we doing today simply because we have always done it?
That last question can be uncomfortable. It can also be the most valuable.
The Real Lesson From HUL
It would be tempting to write that Priya Nair “turned around” HUL. That would go beyond what the evidence can establish.
She took charge in August 2025. The company’s strategic actions became more visible during her tenure. Performance improved progressively, culminating in a strong March quarter. But business performance is produced by many factors—market conditions, brands, employees, distribution, pricing, investments and the broader economy.
The more defensible conclusion is therefore more useful.
HUL sharpened its choices.
It segmented consumers.
It modernised its brands.
It followed changing channels.
It strengthened frontline execution.
It committed capital to fewer, bigger opportunities.
For MSME founders, that is the real lesson.
Leadership is not about having more ideas. It is about deciding which ideas deserve resources—and having the discipline to say no to the rest.
For Your Reflection
Are you selling to everyone—or serving a clearly defined customer?
Are your old products still relevant—or merely familiar?
Are you selling where customers used to buy—or where they buy today?
Are you funding ten small initiatives—or three serious growth bets?
The next phase of growth for many MSMEs may not require more effort.
It may require better choices.
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