HUL Splits Beauty And Personal Care Business
The change is in sync with the global category structure of parent Unilever.
![<div class="paragraphs"><p>Dove soap, a product by HUL. (Photo: Akshay Bandre/Unsplash)</p></div>](https://media.assettype.com/bloombergquint%2F2022-09%2F29587dec-1564-4ff0-9198-2f8817bf6a3e%2Fakshay_bandre_6hLFAQ_PPTo_unsplash.jpg?rect=0%2C147%2C7360%2C4140&auto=format%2Ccompress&w=200)
Hindustan Unilever Ltd. has decided to split its beauty and personal care business into two separate divisions in an effort to increase focus on these high-growth segments amid rising competition from new-age brands.
The beauty and personal care division will transition into dedicated 'beauty and wellbeing' and 'personal care' businesses with effect from April 1, 2024, the consumer goods maker said in an exchange filing on Friday. The change is in sync with the global category structure of parent Unilever Plc.
The two divisions will have their own executive directors. Harman Dhillon, who is currently the skincare head, will join the management committee of HUL as executive director, beauty and wellbeing, while Kartik Chandrasekhar has been appointed to lead the personal care business.
Chandrasekhar is currently the global vice president for Unilever and head of oral care and skin cleansing for developing and emerging markets.
Madhusudhan Rao, who is currently the executive director of the beauty and personal care division, has decided to retire, the company said.
"The business model, innovating rhythm and competitive landscape for both beauty and wellbeing as well as personal care are diverging," HUL CEO and Managing Director Rohit Jawa said in a statement on Friday.
"The transition will allow us to bring more focus and leverage our strong portfolio in both businesses."
The beauty and personal care business continues to be "a source of value creation" for the country's largest consumer goods maker, Jawa said.
In FY23, the BPC segment contributed 37% of HUL's overall revenue, according to its annual report. The division—which consists of brands such as Lifebuoy, Lux, Sunsilk, Clinic Plus, Dove, Lakme, Pond’s and Closeup—reported revenue of Rs 21,831 crore in FY23.
Moreover, Lux and Pond’s crossed the Rs 2,000-crore mark in turnover, taking the total tally to five BPC brands in this club. Besides, it has five digital-first beauty brands, including Acne Squad, Novology, Simple and Love Beauty and Planet.
India’s beauty and personal care market is projected to touch $30 billion by 2027, accounting for about 5% of the global market, according to a joint report by Redseer Strategy Consultants and Peak XV. The category is currently underpenetrated in terms of per capita spending, the report said. The beauty and personal care spend stands at $14 in the country as against $313 in the U.S. and $38 in China, which implies huge scope for growth.
Jawa, during an analysts' call after the second quarter earnings, said the company has a high relative market share in the beauty and personal care business. "So, we feel confident; we understand the consumer." HUL has been extending its brands into new growth spaces, such as sun care, for instance, and even into new formats like serums. We are innovating quite aggressively... This category has a virtuously strong growth rate and a higher profit profile, where we have both the technology, R&D and brand assets."
The consumer goods maker is also strengthening its focus on its digital agenda to make the company even more future-ready. On Friday, the company also appointed Arun Neelakantan as chief digital officer.
Online is a significant channel for the beauty and personal care segment in India, as it is projected to become a $10 billion market by 2027, accounting for roughly 33% of the market then, according to the Redseer report.
"As a company, we need to stay ahead of the trends, build new capabilities, and leverage technology to be future-ready," said Jawa. The new leadership in digital, he said, would help accelerate the next phase of HUL’s growth.