After studying law I vectored towards journalism by accident and it's the only job I've done since. It's a job that has taken me on a private jet to Jaisalmer - where I wrote India's first feature on fractional ownership of business jets - to the badlands of west UP where India's sugar economy is inextricably now tied to politics. I'm a big fan of new business models and crafty entrepreneurs. Fortunately for me, there are plenty of those in Asia at the moment.
An energetic and fit Harish Manwani walks into the boardroom at Hindustan Unilever’s (HUL) Andheri headquarters with a smile on his face. It’s a gloomy day, typical of a Mumbai monsoon, but Manwani has enough reason for cheer. Over the last five years, HUL has once again regained its mojo: Its topline has grown 58 percent to Rs 28,019 crore, and profits are up 75 percent to Rs 3,867 crore. The company has become an ideal proxy for the rapid growth that defines India’s consumer class. As one fund manager puts it, “HUL is the best play on India’s consumer story.”
It’s not something that has come easily to the company. Observers remember the early 2000s when both HUL’s sales and profits were flat. The company’s rise to a place where consistent growth is now considered a given has been no mean task.
India is a key battleground for FMCG companies who are fighting a war that will only intensify in the years to come. Chief rival Procter & Gamble has a clear lead in China, and Unilever is pulling out all stops to ensure it maintains its advantage in India. In May 2013, it announced a $5.4 billion buyback of up to 75 percent of its shares to increase its stake in its Indian arm, HUL.
Leading the charge is 61-year-old Manwani who, as chief operating officer of Unilever and non-executive chairman of HUL, has broad oversight of the company he joined as a management trainee in 1976.
For instance, in 2010, Manwani announced that HUL would treble its direct distribution coverage. It was—as Forbes India wrote in its October 2010 issue—a move that “set the cat among the pigeons”. Something so ambitious had never been attempted before. Four years on, the rollout is complete and it remains an edge that sets HUL apart from its competitors.
Manwani attributes this to an inversion of the typical multinational mantra—think global, act local. At Unilever, they think local, but act global. “It is important to have a point of view on consumer trends and insights. There is no right or wrong answer. It is just a point of view,” he declares.
Manwani has mapped out three strategies to ensure HUL’s continued success.
Digitisation will play a key role in how the company reaches consumers and the way it does business. Over the last three years, HUL has been steadily rewiring itself to make sure it doesn’t get left behind in the new world. To see this through, Manwani has got himself a mentor: A 30-year-old employee who spends time with him every month, showing him how to navigate and monetise the social media terrain.
While Manwani has yet to start a Twitter account, HUL can boast that all its employees are digitally savvy. In 2012, it launched a one-year digital certification programme for every employee. “No marketer can be a marketer unless he/she is curious and constantly learning. That is a marketer’s license to operate,” says Manwani who is fascinated by how quickly this change took place. “Some brands like Axe in some of the key countries are marketed primarily through digital (media).”
Working on an ad campaign with Apple or Google (which includes YouTube)—and Unilever works with them globally—is very different from the print approach. And while both continue to have relevance today, the digital medium will occupy a position of pre-eminence in future. This is something that’s never far from Manwani’s mind, and HUL has been using the digital medium effectively.
It helps that many of Unilever’s international campaigns have enjoyed huge success on social media. In April 2013, Dove’s short film Real Beauty Sketches—produced as part of a global digital marketing campaign for the Dove range of personal care products—became an internet meme overnight. The film went viral instantly; in four days, the three-minute version was downloaded 7.5 million times from YouTube.
According to Manwani, HUL can go and buy all the advertising it wants in the digital space, but there is no success if the brand doesn’t resonate on social media. Making the company’s marketers understand this in double-quick time is the key. “We constantly talk about paid media and earned media. In the new world, earned media will be more important than paid media,” he says.
Unilever estimates that the world’s top 400 cities will account for 50 percent of global GDP in the years to come. Reaching consumers in these urban agglomerations will mean that the company will have to adapt. Already in the West, rising fuel prices has resulted in consumers becoming less keen to drive out to suburban big-box stores. As smaller stores in the city step in to fill the gap, companies need to rejig their distribution capabilities. Instead of making large deliveries to big retailers, there are an increasing number of smaller stores that they need to identify and supply to.
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(This story appears in the 05 September, 2014 issue of Forbes India. To visit our Archives, click here.)