Mamaearth CEO Varun Alagh Writes: In the Start-Up Ecosystem, Being Local Matters

India’s rapidly evolving consumer market, backed by a young, progressive population and a flourishing middle class, is a landscape of opportunity and complex challenges.

The country, home to over 1.4bn people, showcases a dynamic fast-moving consumer goods sector that is expected to grow at a staggering 14.9% compound annual growth rate, reaching $220bn by the end of this year.

The surge in digital penetration is reshaping consumer awareness and access, empowering buyers with informed choices and convenience. Tier-II and Tier-III cities have further emerged as a powerful engine driving consumption, with these regions increasingly mirroring urban aspirations and fuelling market expansion.

Meanwhile, the evolving middle class, whose aspirations are now not just finding value-for-money but also value-for-quality, underscores a growing demand for premium offerings that reflect lifestyle upgrades and self-expression.

Know Your Market Gaps

One of the first steps in the entrepreneurial journey is identifying market gaps and seizing opportunities for innovation. In our case, Ghazal [Alagh] and I started the journey with a simple observation: the lack of safe and toxin-free products for babies in the Indian market. Recognising this gap, we set out to create Mamaearth—a brand committed to offering safe, natural and effective products for babies and mothers, thus, tapping into unmet consumer needs and leveraging innovation.

Early on, we identified a growing demand for natural and clean ingredients, which led us to expand Mamaearth’s portfolio with products that catered to this need. Later, recognising a gap in the market for active ingredients, we launched Derma Co, a brand focused on dermatologically backed, high-performance skin care. By staying attuned to consumer preferences, we were able to build a diverse portfolio that resonates with a wide range of needs.

Building a Rs 1,000-crore consumer brand in India has been a journey of growth, learning and adaptability. Indian markets offer both unique opportunities and challenges that shape every brand.

One of the most critical early-stage lessons was understanding the importance of building trust—be it in the quality of our products, our team’s ability, or even as founders. We realised trust is earned through deliberate actions: partnering with external authorities like MadeSafe.org, sharing our journey as parents creating safe products for other parents and leveraging trusted circles of influence—moms trusting other moms—to build social proof.

In a globalised market, our edge lay in being deeply local. While international brands brought global formulations to Indian consumers, they often overlooked cultural nuances. Innovations like ‘Ubtan’ and ‘Onion’ ranges allowed us to craft a differentiated strategy rooted in India’s heritage, winning the trust of consumers who value tradition and modernity alike.

We were competing with the research and development powerhouses of L’Oréal and Unilever, each employing over 5,000 scientists. Building that level of in-house expertise overnight was impossible. Instead, we focused on creating products and innovations that matched global standards by leveraging the strength of our ecosystem, collaborating with industry experts and tapping into external resources.

Another pivotal learning was hiring for tomorrow, not today. In a fast-growing start-up, if you hire only for immediate needs, your requirements will have evolved by the time the hire is onboarded.

When it comes to fundraising, we followed a principle of raising as much as we needed, not as much as we could. This discipline ensured that we remained focused on sustainable growth rather than being distracted by excessive capital.

Lastly, rituals, symbols and stories have been the bedrock of our organisational culture. Practices like ‘Know Your Consumer’, or creating fun traditions like ‘Booze, Not Business’, reinforced our values and kept the team connected and motivated.

House of Brands

Honasa has evolved into a house of brands with six diverse offerings, each catering to specific consumer needs and contributing to our vision of setting a global benchmark for Indian entrepreneurship. Mamaearth’s journey began as a digital-first D2C brand, leveraging the ecommerce boom to connect with modern consumers. However, as we scaled, we realised that to truly serve the diversity of India, we couldn’t rely on just one channel.

Transitioning into offline spaces wasn’t just a strategic move; it was essential to meet the demands of Bharat. From modern trade and general trade to quick-commerce platforms and exclusive brand outlets, our omnichannel approach has ensured that we are present wherever our consumers expect us to be.

The balance between online and offline was not just about revenue diversification but accessibility. For example, a millennial parent in Bengaluru could order our toxin-free baby lotion online, while a mother in Bareilly found comfort in seeing it on the shelves of her local kirana.

Today’s consumers are more evolved, and the one-size-fits-all approach to personal care no longer applies. Our insights show that within a single household—a mother, father, son, daughter-in-law with a child and a daughter—each member has unique preferences and needs. This is where our house of brands strategy shines, as we’ve built diverse offerings tailored to every type of consumer, ensuring no need is left unaddressed.

A Start-Up Revolution

India’s start-up ecosystem is rapidly evolving into a global beacon of collaboration, innovation and resilience. What was once confined to metros is now spreading across smaller towns and even Tier-III cities, where entrepreneurial aspirations are flourishing like never before. This shift is powered by initiatives such as Start-up India and Digital India, which have democratised access to resources, education and mentorship.

As India continues its rise on the global stage, the potential for homegrown brands to define this journey is immense. Venture capital and investors are increasingly recognising the potential of Indian businesses, backing them with capital to scale and compete globally.

Entrepreneurs, no matter where they are based, now have the chance to create impact on both national and international fronts. For those willing to take risks, embrace change and build with purpose, the opportunities are boundless.

The writer is chief executive and co-founder, Honasa Consumer