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Key Moments
Identify the Biggest Flaw
Challenger brands succeed by pinpointing an industry’s core weakness and positioning themselves to fix it publicly.Target Exclusivity
Brands like CRED and boAt discard mass appeal, focusing on a specific segment and ignoring others to build loyalty.Attack the Market Leader
Successful challengers directly criticize incumbent products as outdated, framing the battle as consumers vs. complacent giants.Sell Lifestyle Over Specs
Instead of competing on technical features, challengers rebrand products as cultural statements (e.g., fashion accessories, social clubs).Look at any major industry in India today, and you will often find one established company acting almost like a monopoly. The market leader sits comfortably at the top, spending massive marketing budgets simply to remind consumers that it exists.
Its TV ads follow the standard corporate playbook: safe, predictable, and forgettable. Its packaging looks almost identical to what it did ten years ago. And in trying to appeal to everyone, it often ends up standing for very little.
Then, a new startup enters the market. 
The newcomer does not have hundreds of crores to spend. The founders know they cannot outspend the giant on full-page newspaper ads or cricket tournament sponsorships. So how do they disrupt the market?
They pick a fight.
The Psychology of Challenger Brands
Real challenger brands do not simply launch a slightly better product at a lower price. They identify the biggest flaw in an industry and fix it publicly.
Take the Indian audio market.
Five years ago, if you wanted to buy headphones, you probably looked at established companies like JBL, Sennheiser, or Sony. These brands sold engineering. Their premium packaging highlighted technical specifications like frequency response, driver size, and active noise cancellation. They treated headphones like serious pieces of technology.
Then, boAt entered the market.
The founders knew they could not beat Sony on audio engineering. They did not have decades of research behind them. So instead of selling technical specifications, they sold affordable fashion accessories.
boAt launched brightly coloured earphones, signed cricketers like Hardik Pandya and young Bollywood stars as brand ambassadors, and priced its products at around ₹1,000.
The brand did not try to compete on premium sound quality. Instead, it focused on how the earphones looked hanging around a college student’s neck or whether they matched someone’s gym outfit.
By turning a technical gadget into an affordable style statement, boAt made the established brands look old-fashioned and boring.
The biggest mistake many struggling startups make is trying too hard to be liked by everyone.
Smart challenger brands do the exact opposite.
They deliberately decide whom they are willing to ignore.
Think about how CRED entered the fintech space.
Traditional banks send dull, threatening SMS reminders asking you to pay your credit card bill. The entire experience feels transactional, almost as if they are extracting your own money. If you pay on time, you receive nothing more than a generic thank-you message. Miss a payment, however, and you are immediately hit with hefty penalties.
CRED completely changed that experience by turning credit card bill payments into an exclusive club where members actually received rewards.
The app actively rejected applicants with low credit scores. Its advertisements featured 1990s Bollywood stars and retired cricketers in absurd, unexpected roles, most famously Rahul Dravid as the “Indiranagar ka Gunda” and a spoof boy band featuring Venkatesh Prasad and Javagal Srinath.
Also read: The Mere Exposure Effect and Modern Brand Building
Traditional financial experts criticised the marketing. Older audiences often did not understand it.
That was never the point.
CRED was never designed to appeal to everyone. Its target audience—young, high-earning urban millennials—loved the exclusivity. The brand succeeded precisely because it was willing to alienate the people it was never trying to attract.
To build a loyal customer base, you cannot simply launch a website or an app and say, “Our product is good.”
You have to point directly at the market leader and say, “Their product is outdated, and they have been taking customers for granted.”
When you position your brand as a company fighting on behalf of consumers against an established giant, people naturally want to support you. Consumers almost always root for the underdog.
If you are launching a startup today, stop trying to imitate the market leader.
You cannot beat a giant by doing exactly what it does.
If the established brand is corporate and formal, be bold and conversational. If the giant sells technical features, sell a lifestyle.
Do not just build a business.
Find a real problem, and attack it.
– Written by Rajnish Singh, a copywriter and strategist with a background in fast-paced journalism, who explores the gap between what brands promise and how consumers actually behave.
