Hindustan Unilever eyeing Rs 100 cr run rate for its D2C brands

Hindustan Unilever (HUL) expects a running rate of Rs 100 crore for its digital brands in the next few months. The fast-moving consumer goods (FMCG) major has eight direct-to-consumer (D2C) sites dealing with beauty and personal care.

Its brands in the D2C space include Dove Baby, Love Beauty and Planet, Simple, Dermalogica and Lakme.

“Lakme has always been one of the leading beauty brands in this country and we have also got D2C for Tresemme, Ponds and Indulekha. And now, the premium business unit has added three brands,” said Kedar Lele, Executive Director, Customer Development Told.

During the company’s conference call after its results, Chief Financial Officer (CFO) Ritesh Tiwari said, “Lakme has the highest number of Instagram followers among any beauty brand in the country. It is a true digital brand and that is why it is no surprise that it basically has over 30 per cent of the business which comes from the e-commerce pure sports, Amazon-Flipkart-hero counterpart. Lakme also has its own D2C site and we get 2 million unique visitors to that site every month.

Lele said over time direct-to-consumer is an elegant way to serve a specific set of consumers with specific needs and demands. He said that they (consumers) are also more aware and they are demanding more.

The company also has five Nano factories for its D2C brands.

Lele said these are not standalone factories but have created dedicated spaces within the existing factories to be able to do justice to the scale of the D2C brands.

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The company has not invested anything more than (Rs) 100 crores in its Nano factories without giving the exact figure of investment.

“We’ve started using a few different approaches to the agile innovation cycle, speed-to-market, fail fast and when some don’t work,” Lele said.

When there are small volumes, he explained, it allows the team to use these online systems to fail faster and better close the loop with consumers. And, by better closing the loop with consumers, the company can bring a very different energy to the organization.

HUL intends to bring more of its global brands to India and introduce them through D2C mode.

While the company has its own set of D2C brands, it also launched its own venture called Ushop, which it started during the pandemic to sell its products online. It also has Pinnacle, through which its supply chain or distributors and retailers can order HUL products online.