HUL Launches UShop Web Store To Directly Sell Products To Customers
Hindustan Unilever Ltd. is live testing its digital store for consumers as the Covid-19 pandemic prompted people to turn online to buy everything from groceries to medicines.
“UShop, a web store, is being tested in Delhi and Mumbai to facilitate digital commerce for the brands,” India’s largest consumer goods maker said in an emailed statement to BloombergQuint. “The in-market tests have led to some early learning and we are now in the process of scaling this to more cities that will allow us to increase serviceability to our consumers.”
The pandemic, HUL said, has led to an uptick in e-commerce penetration with many first-time shoppers. “UShop will meet the needs of our online shoppers, allowing them to buy some of our brands with the trust of authenticity and promise of proper service.” This direct relationship with consumers, according to the company, will also help to “build more personalised brand experiences”.
According to two people privy to the matter, the fast-moving consumer goods company’s online store has been live for the last three months.
HUL, however, clarified that UShop won’t be integrated with its Shikhar app — an online business-to-business platform for retailers to place orders.
To be sure, HUL had earlier launched MyKirana, a brand agnostic hyperlocal marketplace; while UShop sells only the company’s own products.
Sanjiv Mehta, chairman and managing director at HUL, after announcing its results for the quarter ended March 2021, told investors that the company’s contribution from e-commerce stood at 5-6%, and the profitability of this channel is higher than modern trade, comprising supermarkets and hypermarkets.
The launch of the company’s UShop web store comes after it tied up with Reliance Industries Ltd.’s Jiomart for distribution of products — a move that saw protests from traditional distributors, who dominate India’s retail supply chain with nearly 90% share.
Phillip Capital, citing HUL’s annual investor meet, said the company is planning to use data at all levels of its supply chain — demand generation (e-commerce, UShop); demand capture (Shikhar, which helps in digitisation of general trade and partnering banks, financial institutions for working capital requirements); and demand fulfillment (ensuring last delivery, usage of data and analytics, which help in optimisation of operations).
“The management expects the initiatives to fuel innovation, generate efficiencies and drive new category development based on consumer insights received on real time basis,” the brokerage said in a report. “Moreover, buzz word of artificial intelligence and machine learning were used multiple times. We completely trust HUL’s management in driving best in class growth based on past track record.”
Phillip Capital also said HUL was making the company’s future fit to take direct-to-consumer brands across categories by imbibing digital-first culture among existing employees and hiring talent to address the challenge. “Due to intense competition in the beauty and personal care category, the company has set up separate team dedicated on coming up with digital-first launches, where prototyping of new product development will be done much faster based upon current consumer insights.”
According to Motilal Oswal, the maker of Lux and Dove soaps has digitised the entire value chain, from supplier to customer, and data is now considered the company’s third-largest asset apart from brands and people.
The company’s analytics team is improving data captures, reducing the time to launch, facilitating launches in the right channel and markets, improving logistics efficiency and reducing costs, and helping it find the right assortment of retail stores, the research house said in a report.
(Updates an earlier version that said UShop is an app. HUL has clarified that it launched UShop as a web store.)