Hindustan Unilever sees consumer shift to e-commerce boost direct-to-customer brand growth

By

Isabelle Crossley

Published
Jan 24, 2022

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.