Hindustan Unilevel

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INDEX

1. Market research
2. Hindustian Unilevel

1. Internal Analysis
2. SWOT

1. Strategy

1. Target
2. Actions for promoting
3. Actions for engagement
4. Future opportunities

1. Conclusion        

Although digitalization and internet spread are recent phenomenon in India, it is changing everything from social relationships to shopping habits and societal norms. Digital opportunity for companies is large and growing, but to take advantage of this potential, companies need to know and understand the extraordinary diversity which defines the country, in order to do the best strategy.

1. Market research

India is divided in 450 districts and approximately 6,30,000 villages, with a population about 1,296,384 billion, according to data of the World Factbook. Taking this data into account, consumption promises to be massive in India. However, things are much more complicated than it seems. Urban population is only the 34 %, and the major urban cities, knowing also as Tier 1 cities are New Delhi with 28.514 million, Kulkata with 10.98 m, Bangalore 11.44, Chennal 10.456 and Hyderabad 9.482 m. The rest of population lives in smaller cities (Afra, Lucknow, Jaipur, Chandigarh and Nagpur) and rural areas. Due to the dimensions of the country, migration to urban areas is not as much concentrated as in other countries. Indian population is booming in areas near small cities across all country. It is estimated that about 40 % of the population will be living in urban areas by 2025, growth that is taking place in small or emerging cities and that will account for more than the 60 % of consumption of all the country.

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        Indian expansion 2015. Source: BCG

Expenditure in these emerging cities is increasing about 14 % a year, compared to the 12 % of bigger cities. Although these consumers have strong money orientation, significant local cultural affinity and a more conservative financial outlook than those in the biggest cities, they have also high purchasing aspirations that are constrained by the product availability. However, consumer behavior differs among cities, that’s why companies must know which one is the best strategy to approach to these consumers and not to deal with them as an homogenous group.[pic 6][pic 7]

Regarding the internet, Adoption in India is occurring really fast, it is estimated that there will be more than 850 million of internet users by 2025, more than the combined populations of the G7 countries.

Internet use is mobile oriented: 40 % of mobile users use a smartphone, around 300 million, and there will be 250 million more each year. The 43 % of smartphone users do research only on smartphones. And only the 1 % do it on desktops and laptops.

This growth is due to the decrease of price of data from Rs 200/gb to Rs 6/gb.

Regarding the profile of user, it differs from the beginning. By 2020, half of internet users will be rural, 40 % will be women and 33 % will be 35 or older. However, the determinant for consumer behavior is not age, gender or location, but digital maturity.

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Internet users in India 2018. Source: Ultraxart.com

Related to internet purchasing, Indian e-commerce follow the trend of growing. According to a study carried by the Boston Consulting Group, the digital’s influence on purchase is increasing. From 2014 to 2016, the number of online buyers rose to between 80 million. Digitally influenced spending is projected to increase more than tenfold, to between $500 b. and $550 b.,- and to account for 30 % to 35 % of all retail sales – by 2025.

India e-commerce is expected to grow $200 billion by 2026. Revenue will grow from $39 billion in 2017 to $120 in 2020, growing at an annual rate of 52 %, the highest in the world, being electronic the biggest contributor to online retail sales followed by apparel.

Within e-commerce, grocery market is a niche full of both opportunities and challenges. India is the 6th largest grocery market in the world and one of fastest growing markets for online groceries. However, considering the perishable character of products, it presents many challenges for enterprises due to the low margins grocery generates and investment in infrastructures. At the present e-grocery is estimated to be less than $100 million, but it is expected to be worth billions in the coming years. According to Menon, cofounder and CEO of BigBasket, they anticipate surpassing the $20 billion by 2020.

Consumers show receptive to this new way of shopping. The 60 % say that convenience is the main reason to buy online, for more than half of online shoppers, discounts are also a key element when choosing online method, and it is the availability and assortment for one third of online shoppers. However, there are still some barriers as the trust, the lack of internet infrastructures, the fear of fake products or lack of touch and loyalty to neighborhood shops (kiranas).

In order to reduce these barriers, some investments have been made by private and public institutions:

• Paytment Payment Bank: India’s first bank with zero charges on online transactions, no minimum balance requirement and free virtual debit card.
• Google and Tata Trust have collaborated for a project to improve internet penetration among rural women in India.
• In the Union Budget of 2018-19, government has allocated Rs 8,000 crore ($1.24 billion) to BharatNet to provide Broadnet services to 150,000gram panchayats.

Regarding competition, Hindustan Unilevel is the largest company for fast-moving consuming goods, however they have strong competitors in e-commerce. Flipkart, one of the strongest e-commerce platforms for FMCG, was acquired by Walmart, the biggest retailer in the world. The monster of e-commerce, Amazon, has also entered in the e-commerce market of India for groceries. Hindustan Unilevel must find a niche where it can obtain profits short term and can expand long-term.

1. HINDUSTAN UNILEVER

2.1 Internal analysis:

• Strenghts

Hindustan Unilevel, like said before, it is one of the biggest companies for FMCG in the world with a long and international experience in the market of B2B.

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