Hindustan Unilever Limited to focus on e-commerce, modern trade channels

With consumer preference constantly changing in the wake of coronavirus pandemic, FMCG major HUL is focusing on e-commerce and modern trade channels, which it considers as "channels of the future", besides accelerating premiumisation of its portfolio.

The new technologies are changing the landscape of sales, and HUL is evolving to adapt to the trends by embedding technology across its end-to-end value chain to build a business, which is future-fit.

"We continue our journey of growth in modern trade and e-commerce, the channels of the future. We are using e-Commerce channel to drive the new benefit segments and new formats. We are focusing on building online shelves on the e-Commerce platforms with winning point of sale communication," HUL Chairman and Managing Director Sanjiv Mehta said in his address to shareholders on the company's annual report for 2019-20.

Consumer preferences are "constantly changing", and HUL is leveraging the "fastest growing channel of e-commerce by making all our brands available across platforms" and playing a differentiated portfolio strategy curated for this channel.

While talking about growth of online sales, Mehta said, "new technologies are changing the landscape" of the consumer goods market, bringing opportunities for brands and consumers alike.

"Consumers are shopping through more diverse channels and smaller local brands as well as digital-first brands are increasingly entering the market," he said, adding HUL will continue to be "agile and responsive to leverage market opportunities and navigate" through the challenges.

"By staying close to consumers and their needs, we ensure that our business continues to grow, while having a positive impact on people and the planet. Our strategy is constantly evolving to adapt to the trends and forces shaping our markets and impacting our multi stakeholders," he said.

The company is also curating innovations to specifically cater to the retail and e-commerce channel. A dedicated expert team is working closely with all key e-commerce partners to create competitive advantage for the business and scaling up at a rapid pace in line with the overall channel growth.

"We are determined to stay the course on our strategy and continue innovating for the future by bringing relevant global brands into India, creating local jewels as well as exploring new business and channel models which are future fit. We are digitising our route to market and having a strong presence in the growth channels such as modern trade and e-commerce," he noted.

Moreover, HUL is embedding technology across its end-to-end value chain to build a business that is Future-fit. It continues to drive organisation's wide digital transformation agenda under the umbrella of 'Reimagining HUL' to make HUL future-fit, Mehta added.

"We are looking at data and technology to help us make a paradigm shift in serving our customers and consumers. We are picking up consumer signals real-time through the People Data Centre, which analyses consumer sentiments and conversations about our brands and categories. We are driving precision marketing to identify consumer needs and direct targeted content," he said.

It has also created an online platform 'Cleanipedia' to help consumers with housekeeping and cleaning tips built from the years of experience of our household favourite brands such as Comfort, Surf excel, Rin, Active Wheel, Magic, Vim, Domex, and Sunlight.

"We continue to focus on the key growth channels of Modern Trade, e-Commerce and Health & Beauty. Our premiumisation journey is accelerated through the touch and feel benefits of Modern Trade," Mehta said.

In order to make sure that the company is ahead of the curve, he said, "We listen for signals that predict the next ‘big thing’ using data and advanced analytics. In our People Data Centre, we analyse millions of enquiries our Consumer Carelines receive each year and the conversations about our brands online".

"The insights we get drive the innovation and marketing of our brands – and, above all, help us give consumers the products they want," he added.

HUL is using savings to invest in growth areas of the future and in better products and brands and this, in turn, increases margins.