Hindustan Unilever plans to expand online reach of premium brands

USshop, a store that allows shoppers to purchase goods in the National Capital Region and Mumbai, is expected to expand to eight cities soon, a senior HUL executive said.

“UShop’s digital infrastructure and physical back-end will power all of our digital first-class and high socio-economic class brands such as Love Beauty and Planet, Simple, Horlicks, etc., to deliver a consumer experience like any other digital. the first brand’s D2C (direct-to-consumer) site. We will also soon be expanding coverage from two to eight current cities. For that, specialized e-commerce warehousing partners and last mile delivery partners do the fulfillment for us, ”said Aneesh Chaudhry, Data Manager at Unilever South Asia.

Chaudhry said the company is exploring both single-brand site launch options and listing more products and brands on its multi-brand site.

“Given the diversity and range of our offering, we believe that some brands will be more suitable for the stand-alone site and others for the multi-brand site,” he said.

Of course, UShop as a purchasing platform is also operational in other markets where Unilever sells its products. In India, it was launched in the second half of 2020, for which HUL worked on setting up the back-end infrastructure.

The move reflects how the pandemic has changed the behavior of buyers and the response of businesses.

“HUL has been on this journey for quite some time and at the heart of it is ensuring that we provide a seamless engagement and shopping experience to our consumers,” Chaudhry said.

While the overall share of e-commerce for fast growing consumer goods companies (FMCGs) is still below 10%, most companies are betting that it could become a big contributor in the next few years.

In FY2021, the online sales share of maker Lifebuoy soap, Rin detergent powder and Kissan jams was 5-6%.

The company already operates direct-to-consumer branded websites for Taj Mahal Tea and beauty brand Lakme.

Chaudhry said standalone brand sites such as Lakme have received a good response. But as beauty products have evolved dramatically online, smaller, more niche brands in the company’s portfolio could develop online capabilities as well.

USshop operates as a multi-brand platform, allowing HUL to sell its product line. Additionally, it provides back-end and fulfillment support for some of its stand-alone brands, such as Indulekha.

HUL will gradually add more brands – premium brands to begin with – via UShop.

“Previously, we used to set up a lot of tailor-made capabilities by brand – Lakme and Taj Mahal Tea House, for example. Whenever a new brand wanted to go live, we struggled. So we took a more integrated approach, ”he said.

The back-end, from execution to logistics, to the factory, is now integrated into a common pipeline, giving it scalability and efficiency.

Other companies have also developed direct-to-consumer sales capabilities, particularly those that offer a range of household items.

Rival ITC, for example, offers its line of pulses, flour, soaps and household cleaning products through ITC Store; and Marico launched her own Saffola Store shopping site last year, selling cooking oil, oats, and immune boosters.

Meanwhile, Tata Consumer Products Ltd has extended its Tata Nutrikorner platform.

Analysts who follow the online retail market have said that pre-pandemic e-commerce capabilities largely depended on their presence in the markets. But the pandemic has changed that.

“It helps businesses collect data, see buyer behavior, and expand their entire inventory on their own sites. Meanwhile, their brands don’t compete with others like they do in the markets, ”said Saurav Chachan, head of engagement at consultancy RedSeer.

He added that over the years, what has also helped businesses is the availability of warehousing and delivery aggregators that make it easy to bring businesses directly online.

Chaudhry said such initiatives could work for more high-end brands, where it’s not just about buying a product but creating an experience around it.

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