Interview: 'What's good for India is good for HUL,' says CEO Rohit Jawa

Second, the big driver of growth is digitisation. It has democratised India. I know ONDC is going to democratise digi-commerce. But the India tech stack has changed unlike any other country in the world, including China. What we're seeing here is pioneering; it is transformational. It's changing how we do business. And it's also changing consumers' aspirations. Whether you're in a village, in the deep rural east of India, or you're in the city of Mumbai, you can watch the same sort of media and have the same aspirations. That's creating a lot of demand to upgrade and to aspire. We have got to recognise that this is a vast country—1.4 billion people—and we have to be responsible towards our communities and the environment. There is no better company than HUL because our mission is that what's good for India is good for HUL.

We are an India with a 1.4 billion market. Our per capita consumption of FMCG, even in the categories we play, is only $50 odd. If you compare that with Indonesia, that's four times as much, and China six times. There's a huge runway for growth. And when we look at every category we play in, we see that we are about 10–15 odd years behind these mega markets. In some categories, the journey could be a little faster or slower, but what I'm saying is that in the next decade, we could see some categories doubling, tripling, or quadrupling.

A couple of places where I believe this is still happening at a fast pace are beauty care and packaged foods, where I think the pace of transformation will be even faster. And what we're doing about that is building a portfolio to serve all demand spaces. Choosing the segments we want to play in as HUL, where we are good, and where we can bring Unilever's leveraged brands and investing capabilities. I think that's really what we'll have to do as we evolve from where we are today to the 100th year of HUL.

We are the skincare or beauty care market leader, both in colours and in skincare. We already have a four-time relative market share; it's a very margin-accretive category. But as the market evolves, as consumers increase their regime and use more than one stage in usage, the market premiumises and we start to see new demand spaces that go beyond brightening tone management, anti-ageing to hydration, sun care, and so on. We know that we have to play the full portfolio. How consumers buy beauty care is also different; there will be some consumers who will buy it more as part of their daily routine with our Glow & Lovely brand or with Ponds, but many consumers are looking to influencers on social media to buy on platforms like Nykaa and other such e-commerce platforms. They are purely digital; they are about experience.

As far as digital brands are concerned, they are digital in the sense that they are digital-first and not digital-only. So, they have to go beyond D2C platforms to marketplaces. And then they have to go to bookstores and pharmacies offline, and we know that game; we were there. We have already hacked the playbook, so to speak. We have built through our premium beauty business unit a couple of brands that have already crossed the ₹100 crore ARR mark.

Some of our brands, like Lakme, are already very digital. They have a large share of e-commerce. It's getting transformed, it’s getting premiumised and it's looking cool and very attractive. We have very good innovations there. So that brand is an old brand, but not a dated brand. It is a contemporary, fresh brand that offers the best of beauty at a very good price to consumers.

While the fundamentals are the same, the way marketing is done has dramatically transformed. And this is an example of how it's transformed. In the last two to three years, we have built and run the premium beauty business unit. We have an agile innovation lab where we can scan ideas, use machine AI to build concepts, have them simulated, checked for the highest level of opportunity, crafted through our R&D labs in small batches, test them out with consumers, find the product market fit, start getting consumers, acquire them, scale them, get to a level where we feel okay now that this is being loved, and before you know, you have a few hundred crore worth of business.

The way we see digitisation is, it’s going to do one of three things: drive growth, reduce costs, and improve our capabilities. We have been on a journey to reimagine HUL for several years now. And we see them basically in three different parts. There's the operations or supply chain, where digitisation has a big role to play. It's in the area of our customers, so how we go to market—Shikhar is an example, which is our B2B app. And then, of course, our consumers, and I just talked about how we are, for instance, creating products but also selling products through digital commerce and all of the data signals that we get from there.

To give you a few examples, for instance, on the supply chain, we have many use cases that we believe are creating huge value. For instance, we can do digital twins of our factories. Sitting in this complex, we can already model how to improve the productivity of our plants across the country.

When it comes to customers, and if you look at our GT business or traditional trade, we go to 2.7 million stores, of which 1.3 million, including some in rural areas, have signed up on our app. A million of those order every month.

E-commerce and digital commerce are already the fastest-growing channels for us. And we are gaining competitiveness there. And that's going to be a place that we want to lean on because that is going to grow and will more than double from what it is today as a contribution to our business easily in the next five to 10 years.

I would say five would be my hope and ambition. And we're investing based on that.

We are investing more than a third in our digital media. And that's going to go up even further. Because consumers are spending more time on digital, that means that we have more data, we can target better, and our media spending can become even more efficient. And we are investing in leadership and capability, even on the top team, to make sure that our entire advertising and marketing investment is highly optimised through data.