Unilever Wagers Billions on India Economic Revival
Monday, May 6, 2013
The early entry gave Unilever, based in London and Rotterdam, a lead on rivals such as Procter & Gamble Co. (PG) in the world’s second-most populous country. The latest investment would help it gain greater influence over a business that boosted earnings by 37 percent last year selling brands tailored to Indians, such as Fair & Lovely skin lightening cream and shampoo sachets at about 3 rupees (6 cents) apiece.
At stake is a $42 billion market for beauty and home-care products and packaged foods where competitors from P&G to Colgate-Palmolive (CL) Co. are making a bigger push to win shoppers. Hindustan Unilever has so far held its ground as India’s biggest consumer-products maker by catering to local tastes and building a distribution system of 6.3 million sales outlets, more than double P&G’s 2.5 million.
Unilever’s latest investment in India comes as economic growth is weakening and government bureaucracy slows the expansion of international companies from Wal-Mart Stores Inc. (WMT) to Ikea. India’s economy expanded 5 percent in the year through March, the national statistics agency estimates, versus an average of about 8 percent annually for the past decade.