Hindustan Unilever Limited · NSE:HINDUNILVR
Hindustan Unilever — CLSA India Forum 2019
31 slides from Hindustan Unilever's conference presentation, Nov 14, 2019
Slide 1: Investor Presentation - CLSA India Forum cover letter
Hindustan Unilever Limited Unilever House B D Sawant Marg Chakala, Andheri East Mumbai 400 099 Tel: +91 (22) 5043 3000 14th November, 2019 Web: www.hul.co.in CIN: L15140MH1933PLC002030 Stock Code BSE: 500696 NSE: H/NDUNIL VR /SIN: INE030A01027 BSE Limited, National Stock Exchange of India Ltd Corpor
Slide 2: Ecommerce in FMCG: A Fast Changing Retail Landscape
ECOMMERCE IN FMCG A FAST CHANGING RETAIL LANDSCAPE
Slide 3: Industry Landscape
z= “ao a. ” a At INDUSTRY LANDSCAPE 1 eo Tomatoes KEY CHALLENGES Cueymirer? ~~. OPPORTUNITIES SS me es CHANGING RETAIL ECOSYSTEM
Slide 4: Today's Agenda
; , : TODAY’S AGENDA. bh oe Tomatoes KEY CHALLENGES — — ee OPPORTUNITIES me Bowen RETAIL ECOSYSTEM
Slide 5: *Source: BCG Google Study, Multiple external estimates
*Source: BCG Google Study, Multiple external estimates
Slide 6: Source: PWC – NASSCOM - Propelling India towards global leadership in e-commerce, India Census
Source: PWC – NASSCOM - Propelling India towards global leadership in e-commerce, India Census
Slide 7: New shoppers from Small Towns
90% New shoppers from Small Towns 4X Projected Gr in shoppers from Tier 2 (2018~2025)
Slide 8: Low distribution in Bharat
Low distribution Gridlocked Middle India in Bharat cities shopping online
Slide 9: Foods & Beverages
FOODS & BEVERAGES *Source: BCG Google Study
Slide 10: Industry Landscape
INDUSTRY LANDSCAPE bo Tomatoes Cuemoers OPPORTUNITIES ~ CHANGING RETAIL ECOSYSTEM
Slide 11: Key Challenges
KEY CHALLENGES @. @ te OPERATIONAL ale COMPLEXITY PORTFOLIO & COSTS SUSTAINABILITY tt Y BRAND CHANNEL PROTECTION MANAGEMENT CHANGING COMPETITION
Slide 12: Changing Shape of Competition
Rise of “Indie” brands on eCommerce wow Giiikll USTRAA omens BrEABOX : mamaearth ST. BYENESS eave @ iy KINYOGA ..xo%, pi PUT etrctnrn nemncomay 2017 2019 D-G $100 mn =» AQ1 Partners 4 F ‘vesidevertue CHANGING SHAPE OF COMPETITION Size of consumer focussed VC investments in India *
Slide 13: Operational Complexity and Costs
“ a 9) Pp E RATI '@] NAL DIFFERENT CUSTOMER OPERATION MODEL OSTS_ ct — J - “ Self Serve Eaches Not Platforms Cartons Ss HIGHER COMPLEXITY & COSTS OF OPERATIONS Higher Deployment Costs People Costs owe in short term s NEED FOR BUILDING DIFFERENTIATED CAPABILITIES ¥os Business ¥ Right Process e Automa
Slide 14: Channel Management
aT > =. CHANNEL % MANAGEMENT Shoppers Shop across Channels GENERAL TRADE MODERN TRADE Pack price architecture that enables REDUCED INCREMENTAL CANNIBALIZATION SALES
Slide 15: Sustainable Portfolio
SUSTAINABLE PORTFOLIO MRP 100 INTAKE MARGIN +20% OPERATION COST -5% LOGISTICS COST -20% REALIZED PROFIT -5% C.R.A.P. - Can’t Realize Any Profit Re-engineer Portfolio for Value Density /) Retailer Profitability g Manufacturer Profitability
Slide 16: Market Shares and Margins by Channel
MARKET SHARES MARGINS eCOM > MT > GT
Slide 17: Brand Protection
| BRAND )PROTECTIO > ae EG Friction free seller onboarding and cataloguing —- Low control over what gets shipped from 3P sellers Counterfeits Sy ™ » MONITOR FLAG ACT
Slide 18: Industry Landscape
INDUSTRY LANDSCAPE ho Tomatoes KEY CHALLENGES Cuceumaer> wd. OPPORTUNITIES Se —— CHANGING RETAIL ECOSYSTEM
Slide 19: Big Opportunities
| BIG O a aod u New Model for Innovation ) Serving Niche )/ Demand Spaces m2) Precision Marketing
Slide 20: Traditional Model vs New Model of Innovation
TRADITIONAL MODEL — i NEW MODEL ,OF INNOVATION OF INNOVATION t -C)-\ IDEAS i! IDEAS “> Data based -O- Consumer research/ macro trend based Ses FEASIBILITY = ec LAUNCH Ses FEASIBILITY g ann zZ SCALE High cost & high time fal TESTING [} High cost & high time : (3 eae ITERATE LEARN High upfront cost &
Slide 21: Servicing Niche Demand Spaces
SERVICING NICHE DEMAND SPACES Sheet Beard Grooming Masks
Slide 22: Precision Marketing
PRECISION MARKETING y More specific targeting basis browse/ purchase history Target Group Eg: NCCS A,B; Females; 25+ years Demographic Demographic Data Purchase Browse ogs Behaviour Behaviour
Slide 23: The Math Equation for Growth
THE MATH EQUATION FOR GROWTH ax y = ex Ly = SALES TRAFFIC CONVERSION SHOPPERS AVG SELLING PRICE
Slide 24: In the Future
IN THE FUTURE WINNING 7 ’ e é a s End-to-End Consumer Data led Decision Lifecycle Management Making O, Agile Innovation Sustainability
Slide 25: Industry Landscape
INDUSTRY LANDSCAPE ho Tomatoes KEY CHALLENGES Cuceumaer> wt. OPPORTUNITIES Se ws CHANGING RETAIL ECOSYSTEM
Slide 26: Changing Retail Ecosystem in India
CHANGING RETAIL ECOSYSTEM IN INDIA MODERN TRADE
Slide 27: Kirana Has Become the Most Valuable Real Estate in Urban India
KIRANA HAS BECOME THE MOST VALUABLE REAL ESTATE IN URBAN INDIA
Slide 28: Reason: It Is More Efficient
oe) ie a et REASON : IT IS MORE EFFICIENT!
Slide 29: HUL | Creating the Connected Store
HUL | CREATING THE CONNECTED STORE DELIVERY aly ORDERING SHIKHAR sha Humara — Shop
Slide 30: Humara Shop: Enabling Kiranas to Sell Online
RL ka Ome HUMARASHOP | ENABLING KIRANAS TO SEL ONLINE Sena a 2 Humara| Shop Your local kirana, now online |) Cg...
Slide 31: Summary: eCommerce is an Opportunity
ee to be leveraged SU M MARY eCommerce is an Opportunity a Winning with shoppers through innovation & proposition is key The levers to win in eCommerce are different Organizations that build capabilities to win on these will win in the future