Hindustan Unilever searches for growth

05 March 2012

NEW DELHI: Hindustan Unilever, the FMCG group, is seeking to tap the "innumerable opportunities" presented by low-income rural shoppers in India.

Nitin Paranjpe, Hindustan Unilever's CEO, said the audience has a huge "unmet need", promises high volume sales, includes increasing numbers of viable customers as incomes rise, and is boosting the development of new R&D models.

"Serving the Bottom of the Pyramid can be as much a profitable opportunity as it is an opportunity to improve the lives of those on the margin," Paranjpe told the Economic Times.

In demonstration of this, Hindustan Unilever rolled out single-serve sachets of shampoo, available at a low price, in rural regions, products now delivering 65% of volume sales in the haircare category.

"Who doesn't aspire to have hair that looks good and has good bounce and shine? However, the product that helps achieve that was not always within the reach of everyone," Paranjpe said.

Elsewhere, Pureit filters provide clean drinking water to communities without free-flowing supplies and limited access to electricity. "This is a solution driven by market needs," Paranjpe said.

Another core scheme run by Unilever is the Shakti initiative, where it recruits and trains women in hard-to-reach areas to distribute its goods, expanding product penetration and fulfilling wider purposes.

"Shakti does more than just providing a livelihood; it empowers women and brings dignity, confidence and the ability to transact in a businesslike manner," said Paranjpe.

Unilever is also sourcing products directly from small farms, ensuring a steady supply of resources at the same time as offering advice concerning sustainable agricultural methods and increasing yields.

"This is a win-win solution - an example of market forces working to the benefit of the small farmer in states such as Karnataka and Punjab," Paranjpe said.

Nielsen, the research firm, has predicted that annual FMCG sales in rural markets will reach $100bn in value by 2025, compared with $12bn in 2011.

Data sourced from Economic Times; additional content by Warc staff