The country’s largest consumer goods company, Hindustan Unilever (HUL), has identified six key areas to invest in as it premiumizes the beauty portfolio, CEO & MD Rohit Jawa said during the analysts call post Q4 results.
The six areas include face cleansing, sun care, light moisture, serums, weatherproof body care and masstige skincare, covering brands such as Ponds, Lakme, Dove & Vaseline and newer products such as Love Beauty and Planet, and Simple.
At the same time, the company will also use more digital channels, media and influencer marketing to reach out to beauty consumers, especially the younger ones. The company will also set up a beauty council with key opinion leaders from the fashion and beauty industry, using platforms such as the Lakme Fashion Week to stamp its authority in the segment, Jawa said.
“We’ve identified six demand spaces or multi-year bets, which we will believe will grow disproportionately over time. We have already a Rs 2,000-crore portfolio across these six bets, growing in strong double-digits. We will continue to invest to scale them up for the future, especially in e-commerce where sales growth has been over 50%,” Jawa said during the investor call.
The focused approach to beauty comes as the company commits itself to contemporising the beauty business, which was recently split from personal care, amid growing competition from new-age rivals and direct-to-consumer brands such as Mamaearth, Sugar Cosmetics and Wow Skin Science as well as pure-play beauty companies such as Nykaa, L’Oreal and Nivea.
A 2023 report by consultancy firm Redseer noted that the Indian beauty market, which is $19 billion in terms of size, will touch $30 billion by 2027, becoming the fifth-largest market in the world in the category. Growth will be driven by increased awareness of grooming needs, innovative solutions provided by new players and willingness to pay for these products and solutions.
Parent Unilever has already split its beauty and personal care (BPC) business around two years ago, while the split within HUL’s BPC portfolio, its largest segment in FY24 at Rs 22,165 crore or 37% of its topline, will be effective this fiscal (FY25). Analysts estimate HUL’s beauty business to be around 54-55% (or Rs 12,000 crore) of HUL’s overall BPC portfolio. In the March 2024 quarter, for instance, while personal care saw a 10% decline in underlying sales growth, the beauty segment witnessed a 4% growth, HUL said, pointing to the need to carve out beauty from the larger personal care.
“Our focus is to enhance desirability of products using superior technology, premium packaging solutions and formats. To continue to innovate with speed, we will invest and expand our footprint of nano factories and supply chain for the beauty business,” Jawa said, adding that the company was strengthening its beauty partnerships with e-commerce and modern trade channels.