Hein Schumacher, the CEO of Unilever, said that Hindustan Unilever, the company’s Indian unit, has undoubtedly become one of Unilever’s strongest and largest operations.
“The growth prospects of India as a country offer enormous potential, with the nation’s leapfrog into digital and favourable demographics seen in a younger population,” he posted on LinkedIn after a three-days visit to India this week.
Hindustan Unilever Limited (HUL) contributes over 11% to Unilever’s worldwide sales, making it the second-largest market for the company in terms of revenue, following the United States. Renowned for products like Rin detergent, Dove shampoo, and Lux soap, HUL holds a dominant position in the Indian market, leading in the majority of segments it operates, with nearly 80% of its portfolio either gaining or maintaining market share. During his market visits, Schumacher engaged with various stakeholders, including customers and top executives from Nykaa, Reliance Retail, the pharmacy chain Wellness Forever, and local kirana stores.
CEO Emphasizes Digital Transformation at Hindustan Unilever
“Leveraging the digital wave, for instance, 1.3 million neighbourhood retail stores across India have been using Shikhar, our in-house app that has transformed how we engage and conduct business with our partners. Its success demonstrates the tremendous opportunity for the digitalisation of the value chain,” added Schumacher on his maiden visit to the country after becoming Unilever’s CEO last July.
HUL’s Shikhar, an internal ordering application, enables small neighborhood stores to place direct orders, yet these orders are fulfilled through distributors. Widely adopted by several developing nations, this Indian innovation accounts for almost 40% of the total sales for India’s largest consumer goods company.
During his tour of the retail outlets, the executive emphasized his attention on the strategic arrangement of a diverse array of products in even the most limited spaces. He specifically noted the pivotal role played by technology in shaping this organizational dynamic.
“Our in-house app has transformed how we engage and conduct business with our partners at their convenience. Its success demonstrates the tremendous opportunity for the digitalisation of the value chain,” he told retailers.
His visit coincides with the All India Consumer Products Distributors Federation (AICPDF) raising concerns about HUL’s new margin structure. The AICPDF has expressed its determination to fight for the restoration of margins and has even issued a warning about a possible boycott of HUL’s products. However, HUL has maintained that their terms of trade with distributors are bilateral, and the supply of their products remains uninterrupted.
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In the September quarter, HUL experienced a 3% increase in volumes, reflecting that a significant portion, three-fourths to be precise, of its growth originated from increased demand rather than price hikes. HUL’s performance is often viewed as a gauge for the overall consumer sentiment in India. During a recent Barclays Fireside conference, Schumacher cautioned against complacency regarding HUL’s market share, hinting that its historically strong position in India might face challenges with the growing competition.
