Hindustan Unilever, P&G boost Indian adspend

11 December 2009

NEW DELHI: Hindustan Unilever, Cadbury and Procter & Gamble have all increased their adspend levels in India, with a particular focus on rural consumers.

According to figures from the BL Research Bureau, Hindustan Unilever, the biggest advertiser in the Asian nation, heightened its expenditure by 31% in the six months to September, to $241 million (€163m; £148m) overall.

Rahul Welde, vp of media at HUL, argued India must be regarded as offering substantial possibilities to manufacturers "due to the vast population and relatively low consumption and penetration."

"The opportunity is huge. The market is complex with many layers of cities, regions, languages, and thus many nuances," he added. 

"India consequently requires much more intensive effort from an advertising point of view."

While the domestic arm of the Anglo-Dutch corporation has taken out day-long "roadblocks" on Star TV and Zee TV in recent months, Welde posited that a large budget alone was insufficient.

"The effectiveness of advertising is important. However, adspend alone does not result in success," he asserted, as many factors, from pricing to a strong distribution network, also play a crucial role.

As previously reported, Cadbury, the confectionary specialist, is similarly boosting the communications support behind its top-selling lines, as it seeks to improve its position in the country.

Samrat Bedi, vp of client servicing at Ogilvy & Mather, which holds the company's account in India, suggested that while the owner of Dairy Milk and Bournville faces some challenges, the room for growth is considerable.

"In India the per capita consumption of chocolate is 49 grammes, while in other developed markets, like Switzerland, it is about 10kg," said Bedi.

"There is a huge rural belt in India, which has a mithai, or sweetmeats, culture. The task is really to convert these consumers to chocolate."

Procter & Gamble has also outlined its intention to expand its customer base in the fast-growing economy by some 500 million people over the next five years, and attracting shoppers in less-developed areas is seen as essential to achieving this goal.

Arvind Sharma, chairman of Leo Burnett in India, said that, at present, "excluding Vicks, most P&G products are perceived as premium and meant for urban areas."

"P&G is determined to explore rural India, which is virgin land for most of its products, and is heavily focusing spend there," he added.

"In five years, the firm intends to reach out to 75% of the population and increase per capita consumption to $20 (€13; £12)."

Data sourced from Media; additional content by Warc staff