HUL CEO bets on India topping US as Unilever’s lead market by value  | The Financial Express

HUL CEO bets on India topping US as Unilever’s lead market by value 

According to a news report, the Indian subsidiary currently accounts for about 10.7% of Unilever group sales and is one of its best-performing units.

HUL CEO bets on India topping US as Unilever’s lead market by value 
While HUL has been increasing prices across its product portfolio, CEO Sanjiv Mehta said that margins are more affected in the lower-priced category products sold in smaller packs, where the customers are more price sensitive. (Reuters file photo)

India, which is Unilever’s biggest market by volume, will overtake the US to become the largest by value, said Sanjiv Mehta, chief executive officer and managing director of Hindustan Unilever (HUL).

“I clearly see a day when HUL will become the largest Unilever business,” said Mehta in an interview with Financial Times. However, he did not give a timeline for the same.

Also Read: Hindustan Unilever vs Nestle India; Nestle to outperform HUL in long term

According to a news report, the Indian subsidiary currently accounts for about 10.7% of Unilever group sales and is one of its best-performing units. In July, Unilever also pointed out that its sales grew strongly in the priority market of India in the first half of 2022. India comes under the Asia/AMET/RUB (Africa, Middle East, Turkey; Russia, Ukraine, Belarus) market region of Unilever, which reported underlying sales growth of 9% to 13.7 billion euros.

Additionally, Unilever identifies India, along with China and the US as critical markets for its growth. Within the region of South Asia as well, Mehta said that India is a bright spot.

Commenting on the rising inflation and impact on demand, Mehta highlighted that there is “stress” on discretionary spending. “For Indians on limited incomes, the rate of 7% inflation eats into their wallet rapidly. So, the money left for them, even for items which are more essential than discretionary, there is a stress,” he said.

While the company has been increasing prices across its product portfolio, Mehta said that margins are more affected in the lower-priced category products sold in smaller packs, where the customers are more price sensitive. “You can reduce the size [of the sachets] only up to a point because too small an amount will not wash a customer’s hair. We wouldn’t like to see them go to other brands, so we’ll take the hit on margins,” Mehta said.

Also Read: How FMCG companies in India can beat growing inflation

However, he added that consumers with higher incomes are buying larger packs to get the best value. “We are seeing two trends happening: consumers moving either to smaller packs or moving to much larger packs.”

Commenting on the increasing competition in the FMCG space in India with Reliance’s entry into the sector, and Adani Wilmar increasing its presence in the edible oil and staple food segment, Mehta said, “It will be good for the market. India is not a zero-sum game.” He also said that Indian consumers were increasingly getting inclined toward domestic labels over international brands, which is a change in the consumer mindset. “As a nation and in this generation, we’re leaving behind the colonial past. There is pride in India, which is very apparent. Now Indian brands get as much respect, if not more respect, than imported brands,” he said.

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