Hindustan Unilever CEO and MD Sanjiv Mehta wants to use data and technology to re-imagine HUL, which is India's largest FMCG company worth ₹50,336 crore.
The strategy, that has been in implementation for the past few years, is finally falling in place, says Mehta, with the setting up of a state-of-the-art artificial intelligence hub on its campus in Mumbai. “We are able to capture the trends from across the world in real-time. What is happening across the globe, what duration it will take to come here and who is adopting it, we have all the data. We convert that into mixes, we have a library of perfumes, we have 3D machines, which make prototypes and we also do testing virtually,” Mehta explains.
The AI hub, he says, has dramatically accelerated the company’s pace of innovations. In the past year, the company has launched an array of D2C brands such as Dove Baby, Love Beauty and Planet, Simple and Dermalogica. In fact, out of the ₹5,000 crore incremental growth in 2022, ₹900 crore came from such innovations.
The ‘Reimagine HUL’ project began six years ago when HUL brought on board a team of tech-savvy individuals to put together a strategy with data and technology at the core. “What used to be a historically linear value chain where you plan, source, make and deliver, we started creating ecosystems. There is a consumer ecosystem, a customer ecosystem and an operations ecosystem intertwined with data and technology,” he explains.
One of its earliest experiments with technology was the launch of Shikhar App, which enabled retailers to place their orders online. Mehta admits that before COVID, it was difficult to convince retailers to order their inventory through an app and Shikhar, in its early days, showed signs of failing. The retailer was too used to the company’s distributor salesman coming to the store to take orders and then delivering in a day or two. The pandemic helped change mindsets as the once tech-averse retailer had no option but to order through the app. App-based ordering has now become a habit and Shikhar, claims Mehta, is the most adapted app for retailers in the country. “We have a million outlets on Shikhar.”
The Shikhar app enables retailers to order their inventory any time during the day, therefore the company, says Mehta, had to rejig its supply chain and have a backup system, which would also deliver to the retailer as soon as the order was placed. “We would normally have a beat where the salesman would go to the retailer to collect the order and then we would deliver.” This has led to the setting up of Samadhan in the outskirts of Chennai, a completely automated and robotised fulfilment centre that fulfils orders the moment it is placed.
Mehta proudly says that the ‘Reimagine HUL’ exercise has been done indigenously. “The IP and the entire thinking rests with us and we have not taken the benefit of consultants. We have our own models like ‘Jarvis’, which enables you to optimise your spends (it could be distributor commission, trade support or media spends) based on machine learning. We have ‘Livewire’, which gives disparate information that you can access and slice and dice.”
These data-driven technologies, says Mehta, have come in extremely handy to run the business under the ‘Winning In Many Indias’ (Wimi) framework, where the company has divided the Indian market into 15 clusters. For each cluster, it has a separate strategy and the execution model is also different. For instance, the blend of Red Label Tea in Punjab is different from that of UP, but it’s the same brand. Similarly, the formulation of Surf Excel is different in different parts depending on the hardness of the water. “How do you ask a brand manager to do 15 strategies for a brand, it would have been impossible if we hadn’t brought this tech infrastructure together,” he explains.
Technology, claims Mehta, has helped the company to reduce its fulfilment centres from 40 to 20 and that has helped to save costs. Technology has also helped to set up big multi-category factories for dealing with any strategy. “Our Dapada factory has been recognised as the lighthouse factory by the World Economic Forum for digitisation. We are adopting industry 4.0 principles.” Established in 2001, the Dapada site produces three million units per day for brands like Surf excel, Vim, Rin and Wheel. This site started its digital journey in 2018.