Hindustan Unilever sees consumer shift to e-commerce boost direct-to-customer brand growth
Hindustan Unilever (HUL) has seen large numbers of its existing customers switch to online shopping and this has boosted growth for its direct-to-customer, fast-moving consumer goods brands.
It is HUL’s existing customers switching to shopping on e-commerce platforms, not incremental growth, which is mainly responsible for the business’ recent direct-to-customer brands’ growth, according to HUL’s chairman Sanjiv Mehta, the Economic Times reported. With the continued growth in online shopping and new customers going online from non-metro locations, this trend is expected to continue.
“If you look at the total FMCG industry, direct to consumers is still a very small part of the total mix,” said Mehta during a call with investors, ET Bureau reported. “A large part of the growth that is coming to many of the e-commerce players are not consumer growth; they are channel shift growth.”
Direct-to-customer brands are brands which derive the most part of their revenue from direct-to-customer e-commerce platforms (as opposed to multi-brand platforms) and brands which began retailing online before branching out into pursuing an omni-channel strategy. The boom in online shopping, a trend boosted by the pandemic, has enabled many direct-to-customer brands to flourish in India, especially in the personal care and beauty segments.
HUL has launched a number brands in India with a direct-to-customer strategy including Baby Dove, Simple, and Love Beauty and Planet, among others. In December, 2021 Mehta stated that over 30% of HUL’s cosmetics brand Lakme’s sales now come from its direct-to-customer platform, Fortune India reported.
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