A good competitor is good for HUL: Sanjiv Mehta
HUL chairman Sanjiv Mehta, along with his leadership team, will focus on making investments and forming strategies around areas such as data and artificial intelligence to ward off competition from Patanjali Ayurved
Mumbai: Amid stiff competition from Patanjali Ayurved Ltd, Hindustan Unilever Ltd has sharpened its focus on India by dividing the market into 14 independent verticals. Besides, Hindustan Unilever has now divided into 15 verticals, which the company calls country category business teams, which are fully empowered and have been given full responsibility to run the business, Sanjiv Mehta, who is now executive chairman of Hindustan Unilever, said in an interview on 5 April.
Mehta, along with his leadership team, will focus on making investments and forming strategies around areas such as data and artificial intelligence. And that gives Mehta confidence of fending off competition coming from yoga guru-turned-entrepreneur Baba Ramdev’s company. Edited excerpts:
The monsoon prediction has come out. That must have made you very happy?
I am always delighted. India is a country where... you forget my business, anything which is good for India is good for my business.
But, how do you look at this financial year?
I won’t be very liberal with my opinion. We are at a closed period. We have had some fundamental changes in the economy with the GST (goods and services tax) and all and whenever you have such fundamental changes in the economy, of course there is a turbulence. So, that’s now behind us. Our channels have settled down, though the full benefit of GST will come in when e-way bills come into effect. We have always been big supporter of GST. Anything that brings the level playing field or anything that brings efficiency to the supply chain should augur well for the industry.
I remember after your quarter two results, you spoke about waiting for a trend to emerge after demonetization...
If you go back to my precise word, I would have said wait for a couple of quarters and then a trend shapes... India is such a fragmented market where you have millions of stores, you do not want to jump to a conclusion based on one or two data points. When you are talking about a trend then you need to see very clearly a pattern emerging before we can say that yes a trend has emerged.
What about the other disruption caused by Patanjali?
From my perspective, a good competitor is good for Hindustan Unilever. Despite all the competition, local, international, in the last five years, our delta turnover has been more than Rs12,000 crore. This is more than the absolute turnover of most of the competitors. India is not a zero sum game. So, while we look at our competitor very closely, our obsession is always with consumers.
But they (Patanjali) have made deep inroads into the Indian market...
That’s why I am saying India is not a zero sum game. That’s the reason why it is such an exciting opportunity.
What has changed in your business strategy after the emergence of Patanjali?
Two things. One, a corporation cannot live on its past (glories). And you have to continuously reinvent yourself. So, that is the continuous journey for us. We are making huge investments in terms of data, analytics, AI, etc. across the whole value chain. From an organization perspective, for us, speed, agility and resilience are so important.
In the last two years, we have done two big things. One is winning in many Indias—breaking up India into 14 clusters. We don’t make strategies pan-India. We make strategies at a cluster level because India is not a homogenous entity. Competitors are different, penetration levels are different. So, these are very different.
Second is what we call country category business teams where we have got 15 CCBTs in the company, which are fully empowered, which have been given full responsibility to run the business for the year and my leadership team now spends more time on things like innovation in near-term and beyond; disruptions, talent, capabilities, and that has unleashed huge amount of energy into the company. This has happened now for more than year.
Will you be able to maintain your leadership?
Absolutely. I am completely confident of it. At the end, what makes a consumer goods a great company? Two important things: Great brands and a great set of people. We are employer buy choice and we recruit amazing talent. And great people make great brands