HLL: new, improved?
For nearly a decade, Hindustan Lever (HLL) was one of the brightest stars on parent Unilever’s radar screen. So gung ho was the London-headquartered Unilever that it often announced that the Indian model would be replicated in some other parts of the world. So far so good. So what does Thursday’s announcement of a major restructuring at HLL, both in terms of businesses and personnel signify? Why has HLL been forced to forsake its unique model, of varying profit centres, to be more in sync with the parent?
For nearly a decade, Anglo-Dutch foods and toiletries major Hindustan Lever (HLL) was one of the brightest stars on parent Unilever’s radar screen. So gung ho was the London-headquartered Unilever that it often announced that the Indian model would be replicated in some other parts of the world.
So far so good. So what does Thursday’s announcement of a major restructuring at HLL, both in terms of businesses and personnel signify? Why has HLL been forced to forsake its unique model, of varying profit centres, to be more in sync with the parent? “Earlier, it was all about strategy, now it is structure,” says a business consultant.
Unilever had always iterated that its two main businesses were foods and home & personal care (HPC), each accounting for half its turnover. In India, however, HPC, which includes soaps and detergents, continues to wash around three quarters of its topline and almost 85 per cent of its profits. What’s more, foods has been a niggling issue with HLL for some time now.
HLL’s earlier structure had 12 directors (including executive directors) heading different businesses who reported to chairman M S Banga. Now,with soaps and detergents integrated into HPC, HLL has been split along two businesses—HPC and foods—each under a new managing director.
Arun Adhikari, executive director of personal care, has been re-designated managing director of the integrated HPC business. S Ravindranath, executive director, beverages, will oversee the integrated foods buffet, which includes ice cream, processed foods and confectionery. And with effect from July 1, Banga will be non-executive chairman of HLL but elevated as Business Group President of Unilever’s HPC business in Asia.
Reporting to him will be the four-member management committee comprising vice chairman M K Sharma, finance director D Sundaram and the HPC and foods heads. The rest of the directors will all report to Sharma.
There are many who believe that HLL has come a full circle with this restructuring. In the mid-nineties, the company had two managing directors—Keki Dadiseth for the HPC business and R Gopalakrishnan for foods—both reporting to then chairman Sushim Datta. But HLL managers say it is unfair to compare.
“At that time, Brooke Bond and HLL were two separate companies with two heads. Now it is a merged entity,” says a senior HLL manager.
The new structure is what Unilever has been following in most of the global economies. Even neighbouring Pakistan, where Unilever has placed its first-ever woman chairman, has a similar set-up.
In India, propping up growth through mergers and acquisitions over the last decade, the Rs 10,000 crore HLL had become a case study for many of Unilever’s less-successful outposts in south-east Asia and Latin America. Whether it was product development or its marketing strategies or its array of profit centres, HLL was always considered worthy of emulation.
On the home front, it had become a favourite poaching ground for almost all the multinationals that set foot in India after economic reform. And yes, it is fair to say it taught the country marketing.
With such a legacy, Unilever had let India operate as one of the exceptions. Until now. “In Unilever’s internal hierarchy, India seems to have lost out. It is no longer a shining star,” says a management consultant.
Talks of the latest changes were floating around for over six months. And the triggers for the latest salvo are many, claim industry sources. Says a competitor, “The Indian model would have continued to survive if the overall performance had been buoyant.”
HLL’s decade-old track record displays the problems. Since 1993, sales surged five-fold to Rs 10,142 crore in 1999. But in the last four years, it had stagnated to close calendar 2003 at Rs 10,138 crore. To start with, HLL had seen many of its main product lines — soaps, detergents and personal care — stagnate. Plus competition at both the lower and top end of HLL’s product categories has been taking a toll on its results.
For instance, It continues to have a trying time with foods. Take the Rs 2,000-crore ice cream market where the organised sector accounts for only 20 per cent.
Two years ago, both Amul and HLL’s Kwality Walls’s were running almost neck-to-neck. But with Amul’s low-priced offerings licking HLL’s shares, the multinational decided to abandon the mass market to chase the premium business, concentrating on just seven major cities. Today, Amul is the market leader with a 27 per cent share followed by Kwality-Wall’s at 8 per cent.
There are problems in the beverages and “atta” (wheat flour) businesses too. Stiff competition from both loose and packaged tea players including a rejuvenated Tata Tea continues to keep HLL’s beverage business weak, long after Brooke and Lipton were merged.
From 1.09 lakh tonnes in 2001, HLL brewed only 80,674 tonnes of packet tea, with market share dipping from 34.6 per cent two years ago to 33 per cent.
Only last month, Banga had said, “Of course, business is tough but we are using our scale to give us competitive leverage.” Actually, the scale was giving HLL better margins, rather than growth. Operating margins were up from 13.35 per cent in 1993 to 24 per cent last year.
Indeed, in many ways, this has become HLL’s weakness. The general perception is that HLL’s value engineering over the years has taken a toll on product quality. But with consumers downtrading to good-quality value-for-money products, HLL spruced up on quality. But the impact was marginal: sales barely increased.
But a fresh round of price cuts in some of its key categories— detergents, oral care and hair care—in the last couple of months will only put more pressure on its bottomline, say analysts. All this comes at a time when Unilever’s global arch rival Procter & Gamble has woken from its decade-long slumber in India.
When the company’s results were announced in February, Banga said, “The previous couple of years, we were focused on increasing our growth margins and rationalising our brand portfolio. Now that we have the portfolio we want, we are totally focused on growth.”
Unfortunately for Banga, HLL’s stagnation began just when he took over four years ago. An additional problem is the lack of a clear successor. Company managers hint that Unilever had identified many of its Indian managers littered across the globe. And while some fell short of the requisite skills, others declined to head this once growth engine.
“HLL has so many dynamic managers, that it is tough to anoint successors. But now the company has cut off significant flab and concentrated power in the hands of a few,” says a management consultant.
For instance, for foods, apart from Ravindranath, there was Jeetu Mehta heading ice creams, and G Kapur, the head of the acquired Modern Foods, all of whom reported to Banga. With Mehta retiring, Kapur will soon embark on an overseas assignment.
The new structure is expected to impact HLL’s rural distribution channels and big retail outlets. Last year, HLL devised a “diamond” model for sales and distribution . So unlike earlier, where four or five people made sales calls to a channel, each representing a category, now there is only one sales representative for foods.
All these moves could have far reaching consequences for HLL’s business. Already, its share price rose from Rs 150.65 on Thursday to close at Rs 152 yesterday, though that is still lower than its February 17 price of Rs 192.80.
But there are many challenges, warn some. “Let’s not forget that HLL is a strong profit-and-loss driven company. Now the pressure is more on foods as it has been a non-performer. All this while, it could have cross-subsidised its businesses. Now, it is going to be difficult to hedge its risks,” says a long time HLL watcher.
Again, there are many who feel that consolidation could impact response time adversely. But they all agree on one point is that the restructuring could well help put the country’s largest consumer non-durables player back on track.
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Social Beat wins SEO mandate of Tata CLiQ tag rss
The account was won after a multi-agency pitch
e4m e4m Social Beat has won the SEO mandate for Tata CLiQ, one of the fastest-growing omnichannel marketplace in India. Social Beat has been entrusted with optimizing existing content, as well as launching new, optimized category pages systematically on Tata CLiQ’s platform to scale monthly organic traffic by 2x over the next year. The account was won after a multi-agency pitch and will be serviced by Social Beat’s offices in Mumbai.
Shishir Kataria, Director - Marketing, Tata CLiQ, “Shoppers, e-commerce or otherwise, continue to heavily rely on search and discovery throughout their shopping journey, be it engaging with the latest fashion trends or hunting for the best buys. No wonder a platform's ability to be a part of this journey organically drives significant consideration for it amongst potential shoppers. We, at Tata Cliq, are confident that Social Beat will help us develop and optimise content that is highly discoverable to grow our engagement and revenue. Our goal continues to be to drive more and more shoppers to our platform with optimised and curated products and relevant content.”
Vikas Chawla, Co-Founder, Social Beat said, “We are thrilled to partner with Tata CLiQ in their growth journey. We aim to scale traffic to the Tata CLiQ platform manyfold over the next year. Our team of specialised SEO and Content strategists will be working closely to achieve this”
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ShareWill OOH dazzle this festive season?
As the celebrations begin, experts tell us the trends and challenges for the OOH sector this season
Be it the flower-clad taxis in Mumbai for Made in Heaven Season 2 promotion or Zomato’s ‘kheer mangoge kheer denge’ billboards, India's OOH advertising sector has undergone substantial transformation and expansion in the recent years. Even though the medium was severely hit during the pandemic years, it has now managed to rebuild its status. Now, with the onset of the festive season, elections and the cricket world cup, OOH is expected to see more and more advertisers come on board.
Amarjeet Hudda, Chief Operating Officer, Laqshya Media Group, believes most of the clients spend a lot of money during the festive season, especially for Durga Puja, Dussehra and Diwali, targeting their customers in a festive mood. The categories that spend heavily during these months are Auto, Consumer Durables, Real Estate, Organised retail, and E-commerce.
According to Dipankar Sanyal of Platinum Outdoor, there was a huge surge in the festive season last year, and he expects the same this year too. “Last four to five years have turbulent for outdoor. It was picking up in 2019, but then Covid came and everything went flat for two years,” he mentioned.
According to EY-FICCI’s M&E Report 2023, OOH media grew 86 percent in 2022 to Rs 37 billion. The value includes traditional, transit and digital media, but excludes untracked unorganised OOH media such as wall paintings, billboards, ambient media, storefronts, proxy advertising.
Sharing the brand’s perspective, Shivam Ranjan, Head of Marketing, Motorola-APAC, said, “We are going into this festive season with a strong mix of media, including OOH. Within OOH, we are focusing on digital OOH, due to its capability of programmatic serving, measurability, and near real-time insights that allow us to be agile with the communication and optimisation of our campaigns.”
With urbanisation, improved infrastructure, rising consumerism and an increased spending power, clients' expectations from OOH advertising too have evolved. “The clients expect better ROI on every investment, best in class innovations, tech-led planning and execution. Today, technology plays an important role starting from planning the campaign, to measuring metrics to ROI,” Singh explained.
Another trend that Sanyal has observed is that traditionally advertisers looked at spending on OOH nearly two weeks prior to the festivities, but now, most advertisers have now started advertising a week earlier so that they can get maximum eyeballs. Additionally, the digital OOH advertising (DOOH) has also emerged big. The digital OOH screens increased to around 100,000 and contributed eight percent of total segment revenues.
“Now with digital, there is more space for advertisers to come in one frame. Because of this, you can see it is getting more attractive. The innovations too are coming in at a much lower cost and creating a greater impact,” shared Sanyal.
The only challenge with the medium, according to Ranjan, is OOH being a fragmented industry with lack of measurability and agility. This becomes a serious issue for ROI-centric brands. However, the growth of DOOH, which is dynamic, agile and measurable, is giving marketers the confidence to invest in the medium backed by relevant data and outcomes.
Adding to this, Hudda highlighted that availability of good media spots is the biggest challenge in this season as media assets are limited and demand is very high. Due to the gap in the festive season, many clients are not able to fully optimise their campaigns. Rather sometimes, clients are even compelled to divert their budget which adversely impacts the industry, he shared.
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Banking on positive consumer sentiment: BFSI optimistic on doubling festive AdEx : Cache
Some categories within the sector, however, may spend more in the quarter that follows the festive season
The BFSI sector is expecting a surge in demand for loan during the festive season and is looking at increasing its ad spends to cash in on the celebration spirit. Industry leaders say they are hopeful of witnessing a good growth in the number of applications for auto loan, home loan, credit card and health insurance during October, November and December due to positive consumer sentiment this year. However, though most of the BFSI players are planning to double their advertising budget this time compared to the previous year, there are some who are not investing too heavily on marketing during the festivals as they plan to save the money for the fourth quarter.
According to Shailendra Singh, MD & CEO, BOB Financial, they witness incremental growth every year during the October-December quarter, and they anticipate an increase in consumer spending as well as new enrolments for cards this year too. “There remains a surge in customer demand for credit during the festive season,” said Singh.
Singh shared that the company is fully geared up for the launch of #FestiveShoppingRewards on all Bank of Baroda credit card variants under the theme ‘Reimagine Festivities’. They would kickstart festive offerings with the start of Navratri.
The festive season does not just see the demand for credit go up, but there is an increase in applications for health and motor insurance too during this time of the year.
Aabhinna Suresh Khare, Chief Digital & Marketing Officer, BajajCapital Ltd, shared that among insurance products, health insurance and motor insurance reign supreme during festivals. According to Khare, the demand for mutual funds and SIPs too sees a hike.
“Overall, the festive season presents an opportune moment to secure insurance coverage. A plethora of attractive products and services are on offer, with financial institutions extending special discounts and promotions to entice new customers,” said Khare.
The company launched #BlessMeGanesha campaign during Ganesh Chaturthi. “Our goal for this festive season is not only to provide financial solutions but also to create memorable experiences and deepen the connection with our customers,” said Khare.
Though all major sectors spend heavily on advertising during the festive season, within the BFSI sector, some categories spend more in the quarter that follows the festive season.
Explaining the trend, Samir Sethi, Head of Brand Marketing, Policybazaar.com, said that the festive season has varying impacts on the BFSI sector. In the banking sector, for instance, the demand for loans surges as many individuals purchase items and undertake home renovations. Conversely, in the insurance category, the festive season doesn't result in significant changes. Instead, the insurance industry experiences its peak season after the festive period, particularly during the fourth quarter of the financial year.
“As the festive season approaches, there is a noticeable increase in car sales though, leading to a surge in the demand for motor insurance. Consequently, we see a significant uptick in the requests for motor insurance policies. During the festive period, there is an upswing in demand for various categories, such as electronics. However, in the insurance sector, this period doesn't significantly affect us, so we don't run specific campaigns targeting festivals. Nevertheless, we do roll out multiple campaigns throughout the year, and some of them may coincide with the festive season,” said Sethi.
According to the TAM AdEx report on BFSI sector across media for H1, the advertising volume of the sector grew on TV, radio and digital, but declined in the print medium. The report indicated that ad impressions on digital saw 91% rise during Jan-Jun '23 over Jan-Jun’22. The increase was 32% for radio and 4% for TV. The ad space of the BFSI sector decreased by 7% in print.
Speaking on media mix, Singh shared that BOB Financial has a good mix of customer segments belonging to Tier I, II and III. So, understanding their needs and preferred form of media channels, the company will reach out to them through relevant media promotions. “For the easy discovery of our offers, we shall have a dedicated offers page with regular promotion of top offers on our social media and other digital channels,” said Singh. Without disclosing the figure, Singh shared that the company’s promotion budget has surely increased from last year and it will be visible through their multi-channel promotional activities.
According to the TAM report, in the BFSI sector, life insurance is the leading category on TV and radio whereas mutual funds is the top category on digital.
Khare highlighted that in recent times, Bajaj Capital has observed a significant growth in audiences on online platforms and the changing preferences of their clientele. “This observation led us to recalibrate our marketing approach, placing a heightened emphasis on digital avenues,” said Khare.
He further added, “Our promotional efforts are primarily digital-focused, accentuating areas like social media engagement, search engine outreach, content-driven marketing, and targeted online advertising. As we approach the festive season, we've fine-tuned our online approach. By harnessing the insights from data analytics, we aim to grasp our clients' needs and inclinations better, ensuring our content is both tailored and pertinent.”
Khare also mentioned that Baja Capital has doubled its advertising budget compared to the previous year.
“This increase in our ad spend signifies our confidence in the opportunities this festive season presents. This impressive surge in our budget allocation underscores our dedication to maximizing the potential of this festive season and driving significant expansion within our business. We firmly believe that this increased investment in advertising will not only elevate our brand presence but also lead to an exceptional uptick in customer engagement and sales.”
For Policybazaar.com, the media strategy primarily involves a blend of television and digital platforms, an approach that has remained consistent in recent years and is expected to continue in the foreseeable future.
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OMD appoints Dileep Raj Singh as Head of Digital for APAC
Singh will report to Charlotte Lee, CEO of OMD APAC
OMD has added a Head of Digital (HOD) to its Asia Pacific (APAC) regional leadership team with the hiring of Dileep Raj Singh.
Singh is a digital native and brings with him a wealth of experience across product, media agency and client side in APAC, North America and the United Kingdom. His last 10 years have been spent building diverse digital marketing teams covering areas like performance marketing, digital media planning, ad/martech, product marketing, branding and measurement.
As HOD, he will accelerate OMD’s digital leadership agenda, rooted in helping clients address their business challenges and digital ambitions. He will be supporting OMD’s local teams in APAC on operational excellence, and digital transformation frameworks and roadmaps; and the development and implementation of our digital leadership agenda. He will also be working hand in hand with both our regional and global networks to initiate complementary workstreams for our clients in APAC.
“We will continue to invest and win in digital as part of our wider goal to be our clients’ most trusted business transformation partner,” said Charlotte Lee, CEO of OMD APAC.
“It is our global ambition to continue our leadership position in digital, data and technology. In line with this ambition, we are excited to have Singh come on board the OMD APAC leadership team. His background of agency, in-house and start-up experience position him perfectly to understand and address our clients’ business needs,” added Lee.
“Digital media and access to our audience, as we know it, is changing quite rapidly around us. This puts most of us in a delicate but remarkable position, a position from which we can shape and contribute to conversations about the next evolution of digital media. As we embark on this journey, I want to leverage the strength of the OMD network – people, technology, data, tools and platforms – to help our clients pivot and navigate through all the new and evolved possibilities in digital media. With this, I aim to position OMD as an unrivaled partner for our current and future clients; to dominate and succeed in this incredibly competitive and multifarious digital realm,” said Singh.
Singh will report to Lee, and work closely with the team including Chief Strategy Officer (CSO), David McCallen, and Chief Client Officer (CCO), Sadhan Mishra, to drive and support APAC local markets as well as regional clients on digital, data and technology needs.
Mishra was promoted to CCO of OMD APAC recently in June 2023. He will continue to be CEO of OMD Singapore, a position he was promoted into last August. Mishra has been with OMD for over 13 years and in his concurrent new role as CCO, he will focus on key client relationships, understanding their business needs and ensuring we remain a critical partner on their transformation journeys.
McCallen was elevated to the role of CSO of OMD APAC in April 2022, and was previously the CSO of OMD New Zealand for five years where he helped the agency to attain the top place in the market for new business, overall billings and award wins. Since starting in the APAC role, his focus has been on connecting and elevating strategic best practices across the region, building capabilities across a range of strategic outputs, and supporting new business growth both regionally and locally.
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Chandrayaan 3: Brands over the Moon
Some of the best moment marketing posts on India's crucial lunar mission
The nation is in a celebratory mood with its moon mission Chandrayaan 3 making its smooth landing on the lunar surface on the evening of August 23, 2023. The Pragyan rover is in pursuit of discovering water on the moon and is a vital feat for India's ambitious space research.
To celebrate this momentous episode in Indian space research history, netizens have taken to the internet to express their excitement, hopes and fears for the nation's lunar mission. Joining them are brands who have crafted creatives to mark the historic occasion and capture the emotions of the nation who have their eyes set on the moon. Here is our pick of some of the best Chandrayaan 3-moment marketing posts.
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BCCI rakes in Rs 4670 cr in Women's Premier League team auction: Jay Shah 26 Jan
WPL has broken the inaugural auction record of Men's IPL in 2008, tweeted Shah
As expected, Wednesday turned out to be another historic day in Indian women's cricket with BCCI having a windfall gain of Rs 4,600 crores by auctioning five team franchises for the first season, a higher sum compared to what men’s IPL franchises offered to the cricket body during the launch in 2008.
Adani, IndiaWin Sports, Royal Challengers, GSW- GMR cricket and Capri Global have won the bid, BCCI secretary Jay Shah tweeted.
Shah shared in a series of tweets, “Today is a historic day in cricket as the bidding for teams of inaugural #WPL broke the records of the inaugural Men's IPL in 2008! Congratulations to the winners as we garnered Rs.4669.99 Cr in total bid.”
“This marks the beginning of a revolution in women's cricket and paves the way for a transformative journey ahead not only for our women cricketers but for the entire sports fraternity. The #WPL would bring necessary reforms in women's cricket and would ensure an all-encompassing ecosystem that benefits each and every stakeholder.”
“The @BCCI has named the league - Women's Premier League (WPL). Let the journey begin…”
The country's top corporates had bid aggressively for the league. Over 16 groups including IPL franchise owners, Adani group, Torrent and Haldiram were believed to be in the fray.
Given the popularity of IPL in India, the event is touted to be a big draw for all stakeholders involved.
The BCCI was reportedly expecting ₹4,000 crore gain through team auction.
It’s noteworthy that Viacom18 has won the Women's IPL media rights for Rs 951 crore for the next five years creating euphoria around the league whose first season will be held in March.
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