Unilever plans to tap premium segments via digital commerce as India emerges as key growth market
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Unilever is stepping up its push into digital commerce and premium segments, with India emerging as a key growth market, as the consumer goods giant restructures itself into a pureplay home and personal care (HPC) business.
The shift follows the planned separation of its foods business and a sharpened focus on faster-growing categories such as beauty, wellbeing and personal care - segments where digital channels and e-commerce are becoming central to growth.
“We are becoming more premium and more digital,” CEO Fernando Fernandez said in a recent investor call, underlining a deliberate pivot toward “greater participation in premium and digital channels” as part of a broader portfolio reset.
At the heart of this strategy is a €39-billion HPC business, with stronger exposure to high-growth markets including the US and India, which together account for close to 38% of turnover.
Hindustan Unilever Limited (HUL) is Unilever's subsidiary in India, and according to the company, “reaches nine out of ten Indian households”.
Digital-first brands, e-commerce-led growth
Unilever’s strategy leans heavily on building and scaling digitally native brands, particularly in markets like India where online consumption is expanding rapidly.
Fernandez highlighted that a set of “insertion disruptive brands… that are digitally native” has already reshaped parts of its business, especially in developed markets, and will now be scaled internationally. These brands, he said, make the portfolio “more future fit” and better aligned with “faster growing routes to market, such as e-commerce”.
The company is also explicitly targeting “d-commerce-led business models” as part of its capital allocation strategy. CFO Srinivas Phatak said Unilever will prioritise bolt-on acquisitions in premium, digital-first segments, especially in India and the US.
“We remain focused on organic growth and selective bolt-on acquisitions… in premium segments, digitally native brands, and d-commerce-led business models,” Phatak said.
This comes alongside a broader investment push, with Unilever planning to reinvest roughly 23% of its revenue annually into brand building, R&D and capital expenditure. Brand and marketing spends alone are expected to exceed 18% of revenue.
India at the centre of growth mix
India features prominently in Unilever’s evolving playbook, not just as a large market, but as a structural growth driver tied to rising incomes, urbanisation and digital adoption.
The company already generates around 62% of its business from emerging markets, with India positioned as a core “anchor market”. Fernandez pointed to demographic and economic tailwinds, such as increasing household formation and higher workforce participation, as factors driving consumption.
These trends are also accelerating the shift toward premiumisation and online buying behaviour, aligning with Unilever’s push into higher-margin, digitally distributed products.
The portfolio mix itself is being recalibrated accordingly. Beauty, wellbeing and personal care will account for roughly 67% of turnover, categories that inherently lend themselves to digital discovery, influencer-led marketing and direct-to-consumer models.
A more focused, higher-margin model
The digital push is tied closely to profitability. By shifting toward premium categories and e-commerce channels, Unilever expects to structurally improve margins, with gross margins projected to exceed 48% and operating margins above 19%.
Over the past three years, the HPC business has already delivered 5.4% compounded annual sales growth and 2.5% volume growth outpacing peers while expanding margins.
The company sees this as a “self-reinforcing model”: a better mix of premium and digital channels drives higher margins, which in turn funds greater investment in brands and innovation.
At the same time, simplifying the portfolio and integrating capabilities, from AI-led formulation to demand generation, is expected to improve execution speed across markets, including India.
Sharper focus, clearer playbook
Even as Unilever exits large-scale foods operations globally, it is retaining its India foods business, calling it a “high-growth, locally-focused” portfolio with strong market positions. But the broader message is clear: future growth will be driven by a tighter portfolio, deeper digital integration, and sharper bets on markets like India.
As Fernandez put it, the goal is to “move faster, scale what works and deliver more consistent performance” with e-commerce and digital-first brands increasingly at the centre of that ambition.