Consumer goods major Unilever will continue investing aggressively in India to strengthen its market leadership, with chief executive officer Fernando Fernandez describing the country as central to the company’s long-term growth strategy.
“We will invest in India to protect the leadership position we have. We really believe that the next decade is the decade of India,” Fernandez told investors during the company’s June quarter earnings call on Tuesday. “We enjoy a privileged position there (India), and we believe that it will be a key contributor to the growth story of Unilever,” he added.
India reported underlying sales growth of 10% in the June quarter, with volume growth of 5%, helping drive an 8.3% increase in underlying sales across Unilever’s emerging markets business. Emerging markets, including India, Brazil and Indonesia, remained the company’s biggest growth engine during the quarter. Hindustan Unilever (HUL) is Unilever’s subsidiary in India.
Fernandez said HUL had “achieved record market share in both laundry and hair”, its “two biggest categories” in the country.”
“In the case of laundry, we are growing more than 5% above the average of the market,” he said, attributing the gains to stronger brands, innovation and improved execution.
He also pointed to improvements in the company’s distribution network. “One of the key drivers of the growth that we are seeing in India is our improvement in general trade. This is a channel that was not growing for us, that now is growing in the mid-to-high-single digits,” Fernandez said, adding that growth opportunities exist across multiple channels.
Unilever’s chief financial officer Srinivas Phatak said the overall priority was to see India as a “high single-digit growth market”. “If we can have bottom line grow slightly ahead of top line, I think that it is really a virtuous circle which then serves the business in India as well as the (Unilever) group well,” he said.