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Some highlights:
- The sense that Unilever is on the up, whereas P&G is in trouble, is the latest swing of a pendulum that only five years ago saw Unilever struggling as P&G soared.
- P&G expects developing markets to contribute 37% of its total revenues this year, up from 34% in 2010 (and 23% in 2005). For Unilever, the share from developing markets is already up to 56% of sales, from 53% in 2010.
- P&G had underestimated the competition in emerging markets, not just from traditional rivals like Unilever but from local firms, some of which are fast becoming as professional as any multinational company from a rich country. As a result P&G underestimated the cost of building its presence in these countries. In its efforts to find cash to finance its emerging-market expansion, P&G pushed up its prices in rich countries to levels that consumers were not ready to accept.
- Unilever is far stronger than P&G in India, where it has long been considered a local company (likewise in Bangladesh, Pakistan and Sri Lanka). It is still known there as Hindustan Unilever, a reference to the decades its local subsidiary spent as an essentially independent company before its fuller integration into the global firm in recent years.
- Unilever benefits from India's continued reliance on small family shops (compared with the supermarkets prevalent in China), with which it has long-established relationships, and from India's far larger bottom-of-the-pyramid population.
It seems that Hindustan Unilever has the upper hand in India due to its efforts to reach every possible segment. Its inclusive attitude and innovative strategies are the key to reach masses.
Read the entire article HERE
Source: The Economist; June 30th, 2012
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