20 Mar 2024
Hindustan Unilever Ltd (HUL) plans to expand its premium beauty business and increase premiumization within its personal care brands Tresemme and Lakme. Since it introduced these digital-first brands in 2021, the premium beauty business unit (PBBU) brands have got an annual recurring revenue (ARR) of ₹100 crore. They include Simple, Love Beauty and Planet, Acne Squad, and UV Squad.
According to Harman Dhillon, executive director of beauty and wellbeing, HUL managing committee, the company started the PBBU for the affluent class concentrating on angular demand and unique marketing models. The brand aims to cater to the ever changing beauty requirements in the country by dividing them into affluent classes and offline users who want to buy premium products. Thus, HUL aims to make its offline business also contemporary through innovation and insights from the affluent category.
In December 2023, HUL had a spin-off of its beauty and personal care division, dividing them into beauty and wellbeing (B&W), and personal care (PC). This will be effective from April 1, 2024. According to Harman, the company realised that a part of the business needed new-age marketing, unique business models, and a new end-to-end supply chain.
India’s beauty market is expected to expand from $17 billion in 2021 to $30 billion in 2026 as more consumers expand their beauty buys, experiment with products, and upgrade to expensive ones. Also, both domestic direct-to-consumer brands and global brands are now introducing targeted products, and HUL plans to also develop a market for such products.
Harman added that there is disproportionate focus and investment in these sectors. Within FMCG, beauty and well-being is one of the most lucrative segments. Only shampoos and face cream have a penetration of 95% and 60% respectively, but in all other segments it is at sub 20-30% penetration. Thus, it is sensible to expand disproportionately because it will better the quality of growth profile for the parent company too.
HUL also plans to hike up its investments in hair serums through Sunsilk and sun-protection through Pond’s and UV-Squad brands. They intend to have many new products by this summer. Harman added that there will be more innovation, contemporization, and science being included in the core brands. It will go hand-in-hand with faster innovation, getting into more white spaces, and having more unique marketing models with influencers, D2C, and digital first.
