HUL focuses on six important areas to promote expansion
CEO & MD Rohit Jawa said during the analysts call after Q4 results that Hindustan Unilever (HUL), the biggest consumer products firm in the nation, has selected six important areas to focus in as it premiumizes the beauty portfolio.
The six categories encompass names like Ponds, Lakme, Dove & Vaseline, as well as more recent items like Simple, Love Beauty and Planet, including sun care, light moisture, serums, weatherproof body care, and masstige skincare.
In order to connect with beauty customers, particularly the younger ones, the firm will also use influencer marketing, media, and more digital platforms at the same time. In order to establish its influence in the field, the firm will also organize a beauty council of influential figures from the fashion and beauty sectors, according to Jawa. It plans to use events like Lakme Fashion Week for this purpose.
Six demand spaces, or multi-year bets, have been chosen because we think they will increase disproportionately over time. Across these six plays, we now have a Rs 2,000-crore portfolio that is expanding at a robust double-digit rate. Jawa said on the conference call, “We will keep investing to scale them up for the future, notably in e-commerce where sales growth has been above 50%.
The company’s commitment to modernizing the beauty industry, which was recently separated from personal care, is reflected in its targeted approach to the market. This is in the face of increasing competition from direct-to-consumer brands like Mamaearth, Sugar Cosmetics, and Wow Skin Science as well as from pure-play beauty companies like Nykaa, L’Oreal, and Nivea.
According to a 2023 research by consulting company Redseer, the $19 billion Indian beauty industry is expected to grow to $30 billion by 2027, making it the fifth-largest market in the world for that particular product. Increased knowledge of grooming requirements, creative solutions offered by new businesses, and consumer willingness to pay for these goods and services will fuel growth.
The beauty and personal care (BPC) division of Parent Unilever was separated almost two years ago, and this fiscal year (FY25) will see the separation inside HUL’s BPC portfolio, which was its biggest sector in FY24 at Rs 22,165 crore, or 37% of its topline. Analysts estimate that HUL’s beauty division accounts for around 54-55% (or Rs 12,000 crore) of the company’s total BPC portfolio. For example, in the March 2024 quarter, underlying sales growth for personal care decreased by 10%, while growth for the beauty sector increased by 4%, according to HUL. This indicates that beauty has to be separated apart from the broader category of personal care.
Our goal is to increase product attractiveness via the use of premium formats, packaging solutions, and technology. Jawa said, “We will invest and expand our footprint of nano factories and supply chain for the beauty business in order to continue innovating quickly. The company is also fortifying its partnerships in the beauty industry with e-commerce and contemporary trade channels.”
