Consumer products multinational Unilever names its “growth stars” – emerging markets, mostly in Asia, where it anticipates robust growth.
The FMCG industry giant has seen significant returns from its investments in emerging markets. China, India and Brazil now account for 58% of its sales. “The combination of quite a big population, strong GDP growth and rapid consumption in the categories we sell means that countries like Vietnam, Pakistan, Bangladesh, Myanmar and even Ethiopia will be our growth stars over the next few years,” said Unilever CEO Alan Jope at this year’s Deutsche Bank Global Consumer Conference. “These are going to be very important for the future and we are investing heavily,” he added.
Jope has been the British-Dutch company’s Chief Executive since January 1 of this year. He was appointed in November 2018, after former CEO Paul Polman announced his decision to retire. Jope had served as President, Beauty & Personal Care, the company’s biggest division, since 2014. He previously ran the North Asia business, and served as President, Russia, Africa & Middle East.
In recent years Unilever has focused on the emerging world, which has been a growth engine for the FMCG industry overall. The company reported a 5% jump in emerging market sales in its latest reported quarter, compared to a 0.3% rise in its big developed markets, Reuters reports. Its diversified consumer goods portfolio spans the beauty & personal care, home care, and food & beverage categories, and includes hundreds of well-known brands such as Ben & Jerry’s, Dove, Knorr, Lipton and Classico. Unilever is Europe’s seventh most valuable company.
Acquisitions in the consumer products sector have been an important part of its growth strategy in emerging markets and elsewhere. In December 2018 Unilever announced an agreement to acquire the Health, Food and Drinks portfolio of GlaxoSmithKline in India, Bangladesh and 20 other markets. The $3.8 billion deal will be completed by the end of 2019, expanding Unilever’s presence in Asia/AMET/RUB (Africa, Middle East, Turkey; Russia, Ukraine, Belarus).
Unilever’s success in bringing its consumer goods to rural populations in emerging markets has given it a competitive advantage. It has done so in part through grassroots distribution strategies and local initiatives such as Project Shakti. As Vijay Mahajan, author of Rise of Rural Consumers in Developing Countries explains, “Hindustan Unilever Limited pioneered the concept of training local women as rural sales agents who sell Unilever products door to door in their communities.” Unilever has adapted the programme in other countries, including Bangladesh, Vietnam, Sri Lanka and Egypt.
