Captains Speak     

Published: July 31, 2024
Updated: July 31, 2024

Hindustan Unilever

AI provides great connect with consumers

Highlighting AI’s (artificial intelligence) role in customized consumer offers, Rohit Jawa, CEO and Managing Director of Hindustan Unilever, stated that “we have 2.6 to 2.7 million stores, of which 1.3 million, including some in rural areas, have signed up on our app. And now we get data signals from all our customers of what they are buying, what they are ordering using artificial intelligence. Now we can create customized offers and we are doing it with a digital selling hub. Today consumers are increasingly discerning and are making well-informed, holistic buying decisions. Hind Unilever started on its product superiority journey to provide best-in-class products and over the years has made very good progress in this space.”

According to him, given this context, the company delivered a resilient performance for the year with an underlying sales growth of 3% and an underlying volume growth of 2%. EBITDA margin was up 40 bps year-on-year. It continues to focus on operational excellence and built back gross margins, with a substantial part of this being reinvested behind brands and capabilities. Net profit crossed the milestone of Rs 10,000 crore this fiscal. PAT before exceptional items and EPS grew 4% and 2% respectively. The company has seen a marginal dip in marketshares.

FIRM ‘FUNDAS’

The company’s business fundamentals continue to remain strong, as can be evidenced by healthy penetration gains and business with growing or stable brand power as it continues to expand physical and mental reach. Pointing out that the company’s first thrust is to grow the core through unmissable brand superiority, Mr. Jawa added that “this chart is evidence that it is a powerhouse of big purposeful brands. It has a total of 19 brands clocking over Rs 1,000 crore each in annual turnover. Put together, these 19 brands account for over 80% of turnover. Clinics Plus is now a Rs 2,000 crore brand, having moved up the table in the fiscal. Boost, Sunsilk and Vaseline are the next three brands that are moving towards the Rs 1,000 crore mark.”

Consumers are increasingly discerning and are making well-informed, holistic buying decisions. It started on its product superiority journey to provide best-in-class products and over the years has made very good progress in this space.

Horlicks is another example of a brand that has grown as planned to deliver an unmissably superior brand. It has sharpened and fortified the proposition of ‘taller, stronger and sharper’ through precise and focused communications, packaging redesign and promotions. It has dialed up nutrition science information at the face of the pack, providing consumers with crucial information about the product. As a result of these actions, the brand has significantly strengthened its position in the market. Penetration, marketshare and brand power have all seen improvement year-on-year.

BEAUTY ‘QUEEN’

Given the context of increasing affluence and underindexed FMCG consumption, the company has a huge opportunity to build categories of the future through marketmaking and premiumization.

HUS is the largest beauty company in India with a history of creating categories across skincare, hair care and colour cosmetics, making it the distinct number one in these segments.

The Indian beauty market is rapidly shifting with changing lifestyles, increased disposable income, exposure to global trends and a growing emphasis on self-care and wellness. The company has identified six key demand spaces, big bets which it believes will grow disproportionately over the next few years. It has a strong Rs 2,000-crore portfolio across these big bets, and it continues to invest to scale them up. This portfolio delivered double-digit growth this fiscal with 50% growth in e-commerce.

Concluding, Mr Jawa asserted that going forward, “we will accelerate our sustainable agenda around four key priorities that have the biggest material impact on the business, notably climate, nature, plastics, and livelihood. By focusing its efforts and resources, the company it will make stronger, tangible progress on these complex challenges while creating opportunities for its business.