Can’t afford to take the eye off the ball: HUL Chairman Nitin Paranjpe on competition

The chairman said that with 50 brands operating in 16 categories Hindustan Unilever is a clear market leader.

Hindustan Unilever Limited (HUL) Chairman Nitin Paranjpe told the FMCG major’s 90th AGM that the company needs to stay vigilant about the evolving competition with changing consumer needs.

“As a company, we may be leaders but we remain very vigilant because, in the consumer goods industry, we cannot afford to take our eye off the ball,” he said while addressing shareholders’ questions about the competition on June 26. He said that the company can continue to grow well and give good returns even with competition. HUL will continue to focus relentlessly on the consumer and serve them well, he added.

Speaking about the competition, the chairman said that it is intense and the company will keep an eye on it and respond as required in the competitive challenges.

The FMCG giant has been facing competition from Patanjali, Reliance Retail as well as many digital firms. Analysts at Nuvama Institutional Equities have noted that the price points for Reliance Retails's soaps, dishwashing bars and detergents were 30-35 percent lower than the market leaders across these categories.

With commodity prices and inflation coming down, in the short-term there is uncertainty and volatility as there is a shift from high inflation, which led the company to take high price rises, Paranjpe mentioned. In the coming months, the balance between volume growth and pricing will undergo change. “We will see less pricing and much more volume growth coming in,” he added.

The chairman said that the world will move towards digital and it will change the companies’ business strategy. Speaking about digital adaptation he mentioned that about 30 percent of Hindustan Unilever’s turnover is captured digitally through applications like ‘Sikhar’ and other B2C applications.

Talking about the FMCG industry, Paranjpe said that the industry is in an attractive position and the company is well placed for the opportunities it will provide. He mentioned that with 50 brands operating in 16 categories Hindustan Unilever is a clear market leader.

"This is not a zero-sum game. The market is large enough for several companies to co-exist. The per capita FMCG consumption is only $50 in India. This number will grow leaps and bounds in coming years," he noted.