The consumer goods multinational, known as Hindustan Unilever in India, has just posted a 4% growth in sales for the last quarter, ending March: although a little above expectations, this is by no means a dominant performance.
The company has lines such as Dove hair care (which posted double digit growth) and Pond’s skin lightening creams to thank for its resilience, CFO P.B. Balaji states, which remain popular despite being up against market pressures of droughts and depreciating demand from rural consumers.
“The business environment continues to remain challenging. Market growth remains soft, particularly in rural areas,” Balaji confirms. “Let me cut quickly to the chase of what our strategy is: consistent strategy. No change at all of working with consistent, profitable, competitive and responsible growth.”
The company is optimistic that the market for FMCG in India will start to pick up in the coming months, according to Sanjiv Mehta, CEO.
The company chief notes that one of the major challenges - a difficult rural market - is now seeing a response from the Indian government, stating: “I am glad the government has recognized this and is taking steps to channel funds in rural.”
The CEO describes Unilever’s performance as “consistent and resilient”, and well-placed to maximise opportunities going forward: “our business continues to be in good shape, brands are healthy and well supported in the marketplace,” he says.
Skin care, hair care and colour cosmetics are all performing well for Unilever, despite a reduction in costs of raw materials which the company had been forced to pass on to the consumer to remain competitively priced.
Speaking of skin care, Mehta notes: “Our core brands are becoming bigger driven by exciting innovation and brought to life by what we call ‘magic in marketing’ linked to the core functionality and social purpose of our brands.”
He pulls out in particular the recent acquisition of Ayurveda (traditional Indian medicine) skin care brand Indulekha as an exciting development for the company’s portfolio in light of rising consumer demand for naturals claims.
“Having just taken control of the brand, we are excited by the strong equity that the brand enjoys among consumers and are progressing the opportunity in leveraging it’s ‘naturals’ and therapeutic positioning,” confirms the CEO.