Over two thirds of Hindustan Unilever's channel structure is focused on the general trade segment. Therefore, the heart of HUL's business is with our kirana merchants, said CEO Rohit Jawa, in a post-earnings call.
"Distributor inclusion is our priority number one. We invest behind this because first, we want our shoppers to be able to shop through kirana stores and then, to be digitally capable," said Jawa. The Shikhar app is an example of a long-term investment in making this particular segment of the channel strong and robust.
However, Jawa added that modern trade is increasing as e-commerce rises. The total modern trade is under the 20 percent-mark of HUL's total business and is gaining share. "We have a strong share in modern trade and aim to keep it that way by investing in category growth alongside our partners," said Jawa.
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Out of modern trade, e-commerce makes up around six-seven percent of HUL's business and is clearly growing. The gains in the market share on the e-commerce front are led by the beauty segment.
However, he noted that quick commerce is only a very small part of the e-commerce business. "It is important to the extent that we have to serve all shopper missions," said Jawa on the quick-commerce front.
"The reason why quick commerce is doing well is because it serves a certain consumer who needs convenience. We have a very segregated portfolio without any significant overlap with modern trade or general trade for what we sell in quick commerce. And it's meant by design to not overlap," he added.
"Our intention, of course, is that in every segment of the market where there is growth, we increase the market shares and we will. We have a basically designed our portfolio and our promotional incentives to ensure that we stay competitive in quick commerce as well," said Rohit Jawa.
Hindustan Unilever's consolidated net profit for the quarter ended Septemebr 2024 declined 2.4 percent to Rs 2,591 crore from Rs 2,668 crore in the same quarter a year ago, falling more than Street expectations.
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