Hindustan Unilever to sell on online marketplaces, not own site

Testimony to the fact that the ecommerce wave is here to stay, a report in Live Mint says that legendary company Hindustan Unilever Limited (HUL) might be working on getting a toehold in the virtual market. HUL’s chairman, Mr. Harish Manwani spoke at the company’s Annual General Meeting (AGM) on June 29th.

Mr. Manwani said that companies have to be more inclusive to cater to a market as wide and varied as India. In a speech titled, ‘Serving many Indias’, Manwani maintained that it was important to have a portfolio of brands to reach out to a wide section, and ensure that both rich and poor had access to HUL’s products.

HUL’s phase two of ecommerce

HUL was one of the first to think of an online store, when they introduced one in the turn of the century. The company has since been selling its wares on sites like Flipkart and Amazon. It had created a team to work on the ecommerce side at this juncture. It also shifted some of its high value goods to the online sphere. Recently, it was at the helm in launching Humashop.com, an online marketplace.

In his speech, Manwani dropped hints about HUL’s increased focus on the online market. Speaking about the need to serve diverse consumers, he said, “Our approach of developing innovations with consumer price as the starting point is at the heart of our inclusive innovation strategy.” He also mentioned HUL’s latest framework, ‘Winning in Many Indias’ (WiMi), which he said was a ‘major organisational transformation’, indicating the possible shift towards ecommerce.

Mint spoke to Unilever’s CEO Paul Polman, who said that the company would work with online marketplaces as against opening its own site.

Capturing different target markets with technology

As part of it’s ‘inclusive of all markets’ strategy, HUL seems to be intent on penetrating the rural and suburban markets. It proposes to introduce salt and clove oil versions of Pepsodent in South India, small tea packets in coastal Andhra, and bring down the rates of detergents in UP, to push up the sales in these areas.

The company is also looking at leveraging technology to help reach remote villages with little connectivity, thus attempting to create a market in inaccessible areas. Manwani also maintained that at the same time, HUL was keeping up with the tech savvy youth of India, who shop online.

With the scales tipping in favour of ecommerce, more and more established brands are moving towards this direction. For some, it becomes a matter of survival, and for some, it is simply an extension of their existing services. Certainly for a name like HUL, it would only mean widening its existing reach.