Unilever India's new CEO encounters challenge of reigniting a lethargic consumer conglomerate
Hindustan Unilever Ltd (HUL), India's leading consumer goods company, is undergoing a strategic transformation under its new CEO, Priya Nair. Nair, a marketing veteran with extensive experience, aims to address the company's sluggish growth and market share erosion by focusing on premiumisation, digital innovation, and portfolio coherence.
Nair's strategy is designed to revive growth and sustain HUL's leadership in India's fast-moving consumer goods (FMCG) sector. The key elements of her approach include:
- Pivot from a hyper-local to a more coherent global strategy: Aligning with Unilever's global portfolio goals, Nair plans to simplify the business by focusing on power brands rather than a wide mix of small regional brands.
- Premiumisation of brands: Nair intends to enhance the market positioning of key brands like Dove and Lakmé to capture higher-value consumer segments.
- Digital acceleration: Nair plans to allocate around 40% of HUL's advertising spend on influencer marketing and bolster direct-to-consumer (D2C) sales, aiming for 20% of HUL’s revenue from online channels by 2027.
- Cost discipline and margin management: To counter price sensitivity in premium segments and rising commodity costs, Nair will emphasise maintaining profitability during growth.
Nair's appointment has been positively received by the market, indicated by an immediate surge in HUL’s stock price.
In addition to these strategic shifts, HUL has taken steps to bolster its presence in the skincare market. In January, the company acquired skincare upstart Minimalist for 26.7 billion rupees ($305 million).
The Indian FMCG sector has been facing a consumption slowdown over the past year, with HUL not immune to this trend. However, with Nair's strategic focus on growth revival, the company is poised to navigate these challenges and maintain its market leadership.
Recently, at least three brokerages, including Goldman Sachs, have upgraded their ratings outlook on HUL, and at least 17 analysts, including Jefferies and Citi, have raised their price target for the stock. This positive market sentiment underscores the confidence in Nair's ability to steer HUL towards a successful future.
- To revive HUL's growth and maintain its leadership in India's FMCG sector, its new CEO, Priya Nair, plans to pivot from a hyper-local to a more coherent global strategy.
- Nair aims to enhance the market positioning of key brands like Dove and Lakmé to capture higher-value consumer segments by premiumising them.
- To boost digital innovation, Nair intends to allocate around 40% of HUL's advertising spend on influencer marketing and push for 20% of HUL’s revenue from online channels by 2027.
- In order to counter price sensitivity in premium segments and rising commodity costs, Nair will emphasise cost discipline and margin management to ensure profitability during growth.
- The market has positively received Nair's appointment, resulting in an immediate surge in HUL’s stock price.
- With Nair's strategic focus on growth revival, the company is well-positioned to navigate the industry's consumption slowdown and continue to dominate the skincare market, as evidenced by recent acquisitions like Minimalist.
