Unilever faces new risk as India's consumers turn pickier, more demanding

The largest consumer company in the world’s most populous nation has provided everyday products from detergent to instant coffee to Indians for decades. Now Hindustan Unilever Ltd. is seeing its fortunes flag as an increasingly sophisticated consumer class with disposable incomes demands more. The Indian unit of Unilever Plc is battling a slowing rate of growth in revenue and profits while its share price is lagging. India’s elite classes are becoming pickier consumers, fueling the success of organic personal-care brands backed by slick social media marketing campaigns. The rise of companies like local upstart Honasa Consumer Ltd, and the inroads made by global names including Estee Lauder Companies Inc. and Clinique Laboratories LLC, is forcing Hindustan Unilever to spend more on product development and advertising. The company’s challenges mirror those of other consumer-goods giants, such as Procter & Gamble Co., L’Oreal SA and its London-based parent, which in recent years have had to acquire the niche brands taking market share from their in-house businesses.