Multi-channel push: From quick commerce to premium beauty, HUL adapts to evolving consumer habits

Mint

3 days ago

Hindustan Unilever Ltd (HUL) is expanding its sales channels, including health and wellness stores, premium beauty outlets, and quick commerce, to adapt to evolving consumer shopping habits, said Rohit Jawa, chief executive and managing director of India's largest packaged consumer goods firm, in its 2024-25 annual report.
"We now have a dedicated premium retail organisation focused on distributing and creating demand for our premium beauty products through the beauty and pharma channels. New channels have necessitated superior point-of-sale availability. We are leveraging advanced technology expertise to strengthen our presence in modern trade, e-commerce, and the fast-growing quick commerce,' he added.
In October 2024, HUL's beauty and well-being portfolio, which includes brands such as Lakme and Dove, went live in 75,000 outlets with the beauty premium retail organisation (PRO). PRO is an exclusive route to market for offline beauty, with 75% coverage focused on health and beauty stores.
Meanwhile, HUL's foods category is witnessing a significant expansion in channels such as modern trade stores and e-commerce, including quick commerce, the company said.
It has rolled out several exclusive products for such channels.
"We had several modern trade and e-commerce exclusive launches in the year, led by Pukka herbal infusions, Bru cold coffee and Korean meal pots. With our premium ice cream portfolio of Magnum, Cornetto and Slow Churn, we continued to strengthen our play in channels of the future, building on the trend of in-home ice cream consumption,' it added.
E-commerce currently contributes 7-8% to HUL's business, a share that is growing faster than the company's overall average. This contribution could potentially reach 15% in the next few years, according to the company's management during their post-earnings call for the March quarter.
Quick commerce accounts for approximately 2% of the business. HUL's assortment on quick commerce has doubled in 2024-25 compared to a year ago.
HUL said e-commerce has evolved into various models. It has set up teams for each model, focusing on future-ready, need-based portfolios.
HUL's wide portfolio of over 50 brands reaches over 9 million outlets in India, making it among the most well-distributed packaged consumer goods companies in the country.
It has invested ahead of the curve in organised trade, leading to higher market shares and strong leadership positions across categories. The growing demand in modern trade will help drive sales.
"We are also investing in e-commerce capabilities to build a strong digital moat…Under the WiMI 2.0 mandate, HUL is also building specialised new routes to market (RTMs) for emerging segments, such as health and wellness, premium beauty, and gourmet food. These channels will help HUL reach more than 70% of the premium beauty and foods markets, while also driving assortment growth,' it added.
The company uses the WiMI (winning in many Indias) strategy to understand and reach diverse consumer groups across the country.
Apart from premiumization and more consumers trading up to better brands, HUL has also outlined rapid digitisation as a core area of future growth. This includes digitizing Kirana store partners via apps, bolstering e-commerce offers, and spending more on digital marketing channels.
The company still draws a majority of its business from kirana stores or traditional sales channels.
Kirana stores are vital to any large packaged consumer goods company's distribution and reach in India, making up to 70-80% of their sales.
'Over the last year, we have focused on strengthening this channel with a 'kirana-centric, distributor-inclusive' model. Our strategy involves building stronger relationships with our distributor partners and kirana stores, partnering with them in their journey of digitisation, empowering them with future-fit capabilities to ensure we position them to succeed in the rapidly evolving distribution landscape,' it said.
HUL is also 'actively' collaborating with the Government of India's initiative, Open Network for Digital Commerce (ONDC). 'With the help of an integrated module in Shikhar, neighbourhood kiranas can go live on ONDC seamlessly and sell their entire range of products online,' it said.