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13 May 2022
Unilever: India remains a bright spot amid global gloom
Managing across marketsIndia
In a visit to India, Unilever chief executive Alan Jope told reporters that he could imagine the company’s India business to grow larger than the US within a decade, based on current trajectories – but in an inflationary environment, consumer behaviour is adapting.
Why it matters
Speaking to the Economic Times, Jope was commenting on the fast-moving consumer goods (FMCG) giant’s Indian operation, which accounts for 11% of global revenues (the US accounts for 19%), which also acts as a proxy for Indian consumer sentiment. HUL’s (Hindustan Unilever) performance is not only a portrait of the company’s future but of the Indian market as a whole.
By the numbers
Amid an inflation squeeze, Unilever’s commercial fortunes are reflected in India.
Volume sales in India were flat over the quarter ending March.
Price increases, however, contributed to a 10% growth in sales.
Jope tells the ET that a handful of trends are driving this:
Buyers are downsizing.
Buyers are “eeking out” products they already have.
In certain categories, shoppers are trading up, having noticed that price per ml is actually cheaper. “A very smart way of behaving”.
What to read from this
Price rises can only go so far when shoppers are so attuned to exactly how much bang they’re getting for their buck. Marketers will have to work hard to justify why branded items remain superior to private-label or discount items.
Marketers and agencies should also consider new thinking around the different kinds of savings offers brands can make to increasingly frugal customers.