Why Unilever plc (ADR) (UL) Is Betting on India

Page 1 of 2

Unilever plc (ADR)Unilever plc (ADR) (NYSE:UL) is having a makeover in India. Recently, the consumer packaged goods company had a transitional shift in the Asia-Pacific region with the majority of its brands. With rival The Procter & Gamble Company (NYSE:PG) cutting costs by $10 million by the end of 2016, this is an opportunity for Unilever plc (ADR) (NYSE:UL) to scale up in categories destined for growth.

Investment in India

Investment in India is the key to Unilever’s international expansion. Emerging markets account for the fastest growing markets when it comes to sales growth within categories. With the rise of the middle class in China and India, there is a market ripe for product innovation and consumption as disposable income rises.

Hindustan Unilever plc (ADR) (NYSE:UL), the Indian division of Unilever, is not only reaching the middle class, but also the affluent and the aspiring middle class Indian as well. Unilever plc (ADR) (NYSE:UL) increased its stake in Hindustan from 52.48% to 75%, the maximum that the state of India allows. With a vast makeover encompassing 95% of its brands, it redesigned brands for an initiative called Perfect Store, which launched  in 2011.

The Perfect Store model efficiently transforms the retail store to maximize shelf space and showcase new products. With these store makeovers, more than 3,000 employees transformed 16,000 stores to maximize product visualization and availability. When store sales slumped in 2009 with rival brands maximizing investments in India, Unilever changed the in-store business model and had a massive brand makeover. This model ensures that consumers have access to products and are educated in the quality behind the Unilever plc (ADR) (NYSE:UL) brand. Unilever also overhauled supply chains to operate more efficiently for maximum store growth. This initiative has raised top line revenue for stores by over 4%.

From local to global

Taking on rival The Procter & Gamble Company (NYSE:PG) ‘s home line for India; Unilever plc (ADR) (NYSE:UL) is beefing up operations on all lines to compete with P&G’s soaps, shampoos, and detergents. The Procter & Gamble Company (NYSE:PG)impressively grew market share in 2009, which hastened the change in upper level management for Hindustan Unilever. This change in management forced Unilever to rethink core business strategies for targeted sales growth.

The Procter & Gamble Company (NYSE:PG) also raised their stake in India as well. With revenue increasing by 29%, due to category growth and pricing, they launched a 1 billion dollar investment plan to increase investment across their 14 categories in which they sell goods. They also started production on a plant in China which will help supply chain demands and efficient selling practices. However, The Procter & Gamble Company (NYSE:PG) has a weak product mix when it comes to category growth within brands. Brand recognition has been weak within the oral care line, with Oral-B the only competing brand, solely in the toothbrush market.

Hindustan Unilever plc (ADR) (NYSE:UL) plans to transform the consumer experience in the coming months. With the perfect store model, the local grocery store shelf transforming the shelf from local to global, as more and more consumers want the American products. With the investment from Unilever, supply chain efficiency is insuring a successful store model.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Best Countries To Work In the World

A Profitable Day At The Track: 5 Tips For Betting On Horses

Tearing You Apart: 6 Bad Habits That Ruin Relationships

Learning on the Job: The 6 Biggest Mistakes Parents Make

Shopaholics Rejoice: The 12 Biggest Malls in the World

Fright Night: 10 Horror Movies Based on True Stories

Mach Mania: The 10 Fastest Jets in the World

Military Heavyweights: The 10 Countries with the Most Tanks

All In: The 7 Richest Poker Players in the World

Abracadabra: The 10 Best Magicians in the World

The 10 Richest Asian Countries in the World in 2014

Eyes in the Sky: 10 Things You Need to Know About Drones

Rising Stars: The 6 Best Silicon Valley Startups

Military Muscle: The 5 Most Advanced Armies in South America

All that Glitters: The 7 Most Luxurious Jewelry Brands in the World

5 Things You Didn’t Know About ISIS but Should

Empowering Your Money: The 5 Best Energy Stocks to Invest In

The 11 Best Android Apps You Can’t Get on iOS

The 10 Most Important International Conflicts in 2014

Mood Enhancers: The 20 Most Uplifting Songs of all Time

Lover Beware: The 8 Countries that Cheat the Most

Breath of Fresh Air: The 25 Countries with the Best Air Quality on the Planet

Singles Beware: The 8 Worst Mistakes Made on First Dates

Healthy and Happy: The 10 Countries with Lowest Healthcare Costs

The 6 Best Company Team Building Activities to Build Workplace Camaraderie

Ships Ahoy: The 10 Busiest Shipping Ports in the World

10 Productivity Tips to Save You Time and Help You Do More With Less

Grab a Bite: The Most Popular Fast Food Restaurants in America

Friday Night Thirst: The 10 Most Popular Cocktails in the World

The 6 Greatest Unsolved Mysteries We May Never Figure Out

7 Useless Products You Never Should’ve Bought

The 5 Reasons Why You’re Single and Miserable

The 7 Most Addictive Foods in the World We Can’t Stop Eating (Even Though We Should)

5 Amazing Places You Can Swim with Dolphins

The Top 7 Most Livable Countries In The World

The 10 Most Expensive Baseball Cards Ever Pulled From A Pack

The 5 Easiest Second Languages to Learn for English Speakers

Silver Spoon: The 6 Richest Families in the World

The 20 Countries with the Largest Prison Populations in the World

The Top 10 Richest Actors in the World

The 10 Best Airline Stocks to Invest In Before They Fly Too High

Burger Kings: The 10 Most Expensive Burgers in the World

The 10 Most Ethnically Diverse Countries in the World

The 10 Most Exclusive Credit Cards in the World

The 10 Most Expensive Cruise Ships in the World

The 10 Fastest Supercomputers in the World

The 10 Best Countries for Doing Business 2015

6 Most Expensive Fruits In The World

10 Worst Airlines in the World

The 10 Biggest Tax Havens in the World to Stash Your Money

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!