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FMCG Giant Hindustan Unilever Limited (HUL) Case Study

Devashish Shrivastava

Devashish Shrivastava , Anik Banerjee

Hindustan Unilever Limited (HUL) is a British-Dutch assembling organization headquartered in Mumbai, India. The items of Hindustan Unilever Ltd incorporate nourishments, drinks, cleaning specialists, individual consideration items, water purifiers, and purchaser merchandise. HUL was set up in 1933 as Lever Brothers and following the merger of its constituent gatherings in 1956, HUL was renamed Hindustan Lever Limited. The organization was then renamed in June 2007 as "Hindustan Unilever Limited".

At the start of 2019, the Hindustan Unilever Limited portfolio had 35 items marked in 20 classifications and utilized 18,000 representatives with offers of Rs. 34,619 crores in 2017-18. In December 2018, HUL reported its procurement of Glaxo Smithkline's India business for $3.8 billion out of an all value merger manage ratio of 1:4.39.

However, the joining of 3800 representatives of GSK stayed questionable as HUL expressed there was no provision for maintenance of workers in the deal. In January 2019, HUL said that it hopes to finish the merger with Glaxo Smith Kline Consumer Healthcare (GSKCH India) this year.

History And Journey Of Hindustan Unilever Brands And Products Of Hindustan Unilever Business Model of HUL Business Growth In India Expected Future Growth

case study of hindustan unilever limited

History And Journey Of Hindustan Unilever

Hindustan Unilever Limited (HUL) is India's biggest quick-moving customer merchandise organization. HUL works in seven business sections.

The cleanser segment incorporates cleansers, cleanser bars, cleanser powders, and scourers. Individual items incorporate items in the classifications of oral consideration, healthy skin (barring cleansers), hair care bath powder, and shading beautifiers. Refreshments incorporate tea and espresso.

Nourishments incorporate staples (atta salt and bread) and culinary items (tomato-based items natural product-based items and soups). Frozen yogurts incorporate frozen yogurts and solidified treats. Others incorporate synthetic substances and water business.

HUL's item portfolio incorporates family unit brands—for example, Lux, Lifebuoy, Surf Excel, Rin, Wheel, Fair and Lovely, Pond's, Vaseline, Lakme, Dove, Clinic Plus, Sunsilk, Pepsodent, Closeup, Axe, Brooke Bond, and Bru, Knorr, Kissan, and Kwality Wall's. HUL is a backup of Unilever, one of the world's driving providers of food products , home care, personal care, and refreshment items with deals in more than 190 nations and a yearly turnover of $6.08 billion in 2020.

case study of hindustan unilever limited

Hindustan Unilever Limited traces its origins to Unilever, a British-Dutch multinational company, which is the parent of HUL. William Hesketh Lever was a popular social reformer and is regarded as one of the main propagators of several significant employee benefits options like benefits of health, savings, and more. Thus, his ideologies largely seeped into Unilver and resulted in developing its strong sense of corporate responsibility and leadership. This culture was invariably passed on to the Hindustan Unilever Limited (HUL).

The British-Dutch company Unilever, which emerged as a result of the merger of the operations of Dutch Margarine Unie and British soapmaker Lever Brothers, when it first came to India, discovered the rich and largely unexplored potential of the Indian market. Soon after, the establishment of Hindustan Vanaspati Mfg. Co. Ltd. followed in 1931, which was succeeded by the foundation of Lever Brothers India Limited (1933) and United Traders Limited (1935). The Indian subcontinent had only been importing FMCG products, branded under Lever Brothers since then, the first of which were spotted as early as 1888. Following this, brands like Lifebuoy stepped in 1895, along with other famous companies like Pears, Lux, and Vim. Vanaspati was launched in 1918 and the famous Dalda brand came to the market in 1937.

The 3 Unilever companies - Hindustan Vanaspati Manufacturing Company, Lever Brothers India Limited, and United Traders Limited eventually merged together to form HUL in November 1956. HUL offered 10% of its equity to the Indians and soon swooped into the news, being the first foreign subsidiary to do so.

The organization obtained Lipton in 1972, and Lipton Tea (India) Ltd was consolidated in 1977. Brooke Bond joined the Unilever overlap in 1984 through a global obtaining. Lake's (India) Ltd joined the Unilever overlap through a worldwide securing of Chesebrough Pond's USA in 1986.

The progression of the Indian economy, which began in 1991, denoted an enunciation in the organization's development bend. The expulsion of the administrative structure enabled the organization to investigate every item and open-door section with no imperatives on the creation limit. At the same time, deregulation allowed acquisitions and mergers .

The Tata Oil Mills Company (TOMCO) converged with the organization with effect from April 1, 1993. In 1996, Unilever and Lakme Ltd framed a 50:50 joint endeavor, Lakme Unilever Ltd, to advertise Lakme's market-driven beautifiers and other suitable results. In 1998, Lakme Ltd offered its brands to Unilever and stripped its half stake in the joint venture.

In 1994, the organization and US-based Kimberly Clark Corporation framed a 50:50 joint endeavor—Kimberly-Clark Lever Ltd—which markets Huggies Diapers and Kotex Sanitary Pads. The organization likewise set up a backup in Nepal called Unilever Nepal Limited (UNL). UNL's production line speaks to the biggest assembling interest in the Himalayan kingdom. In the1992, Brooke Bond gained Kothari General Foods with critical interests in instant coffee.

In 1993, HUL acquired Kissan from the UB Group and the Dollops ice-cream business from Cadbury India. Tea Estates and Doom Dooma, two major organizations of Unilever, were converged with Brooke Bond. At that point, in 1994, Brooke Bond India and Lipton India converged to shape Brooke Bond Lipton India Ltd (BBLIL) to empower more noteworthy concentration and guarantee collaboration in the customary beverages business. BBL converged with Unilever with effect from January 1, 1996.

The internal rebuilding finished with the merger of Pond's (India) Limited (PIL) with HUL in 1998. The two organizations had huge covers in personal products, specialty chemicals, and export organizations; other than a typical appropriation framework since 1993 for personal products. The two additionally had a typical administration pool and an innovation base.

In January 2000, the administration chose to grant 74% value in Modern Foods to Unilever. This started the divestment of government value in open division endeavors (PSU) to private area accomplices. The organization's entrance into bread production is a key augmentation of the organization's wheat business. In 2002, the organization procured the administration's residual stake in Modern Foods.

Journey Of Hindustan Unilever

In 2002, the organization made its entry into Ayurvedic well-being with its Ayush item range and Ayush therapy centers. In 2003, the organization procured the Cooked Shrimp and Pasteurized Crabmeat business of the Amalgam Group of Companies, an innovator in marine products trades. Additionally, the organization propelled Hindustan Unilever Network Direct to home business. In 2004, the organization launched the 'Pureit' water purifier.

In 2005, Lever India Exports, Lipton India Exports Ltd, Merry climate Food Products, Toc Disinfectants Ltd, and International Fisheries Ltd were amalgamated within Unilever. In February 2006, Vasishti Detergents Ltd (VDL) converged with Unilever. In September 2006, Modern Foods Industries (India) Ltd & Modern Foods and Nutrition Industries Ltd were included. In October 2006, Unilever stripped its 51% controlling stake in Unilever India Shared Services Ltd, currently known as Capgemini Business Services Pvt. Ltd., to Cap Gemini SA.

In March 2007, Sangam Direct, a non-store home conveyance retail business managed by Unilever India Exports Ltd (UIEL) and a completely possessed auxiliary, was moved to Wadhavan Foods Retail Pvt Ltd (WFRPL) in a droop deal business. Likewise, Unilever completed the demerger of its operational offices in Shamnagar, Jamnagar, and Janmam and shaped three autonomous organizations —Shamnagar Estates Ltd., Jamnagar Properties Ltd, and Hindustan Kwality Walls Foods Ltd. In June 2007, the organization changed its name from Hindustan Lever Ltd to Hindustan Unilever Limited.

In 2008, the organization reported its coordinated efforts with the Indian Dental Association (IDA) related to World Dental Federation (FDI) through the Pepsodent brand to help improve the oral well-being and cleanliness benchmarks in India. In April 2008, the organization demerged and moved certain immovable properties to Brooke Bond Real Estates Pvt Ltd. In January 2010, the organization introduced its new corporate office.

In April 2010, Unilever affirmed the plan of amalgamation of Bon Ltd, an entirely possessed backup of Hindustan Unilever Limited, with it. The selected date for the previously mentioned plan was 1 April 2009 and the plan was made viable from April 28, 2010. Ensuing to the amalgamation, Bon Ltd stopped being an auxiliary of the company.

During 2010-11, Kissan forayed into a new market fragment in three major classifications. It propelled Kissan Fruit and Soya, a delightful mix of organic product juice and soya milk, which appreciated a separated suggestion in this market. The brand likewise went into the Indian (non-sweet) spreads showcase with the dispatch of Kissan Creamy Spread over key towns. In the bakery division, the organization propelled two new items—Chapi and Cream Rolls. The organization stripped 43.31% stake in Hindustan Field Services Pvt Ltd for Smollan Group (the JV accomplice).

Along these lines, Hindustan Field Services Pvt. Ltd. stopped being a backup organization. Lakme Lever Pvt Ltd, a completely claimed auxiliary of HUL, extended the system of Lakme Beauty Salons in that year with the opening of 11 franchises and oversaw salons alongside 18 franchisees' salons.

In December 2011, the organization demerged the FMCG sends-out business, including explicit fares related to assembling units of the organization, into its entirely claimed backup Unilever India Exports Ltd (UIEL). The plan wound up successful on January 1, 2012.

Hindustan Unilever - One Team One Dream

In 2012, the organization went into a concurrence with Unilever to showcase Brylcreem in India. During the year under audit, Unilever and elements of Piramal Realty (Ajay Piramal Group) consented to an arrangement for the task of HUL's leasehold privileges of the land and building named Gulita arranged at Worli Sea Face Mumbai for an exchange estimation of Rs. 452.5 Crore.

On 22 January 2013, the Board of Directors of HUL affirmed a proposition to consent to another arrangement with its parent organization Unilever for the arrangement of innovation exchange imprint permit, trademark registration, and other services on 1 February 2013. This new understanding underlined that the loyalty cost of 1.4% of turnover payable by HUL to Unilever will increment in a staged way to an eminence cost of 3.15% of turnover, no later than the money-related year finishing 31 March 2018.

The expansion in eminence cost in the period from 1 February 2013 to 31 March 2014 is assessed to be 0.5% of turnover and from there on in the scope of 0.3% to 0.7% of turnover in each money related year, paving the way to a complete evaluated sovereignty cost increment of 1.75% of turnover contrasted with existing courses of action no later than the monetary year finishing 31 March 2018.

In 2014, Unilever reported an organization with Internet.org, a Facebook-directed coalition of accomplices to see how web access can be expanded to contact millions of individuals crosswise over India. The organization additionally dispatched Prabhat activity for network improvement in towns around its industrial facilities during the year under survey. Furthermore, the organization also went into association with MTV to embrace its brands during the year under review. In 2015, the organization propelled The Unilever Foundry.

During the year under audit, the organization was perceived as the most inventive advertiser at the Mobile Marketing Association (MMA). The organization additionally resuscitated Ayush with e-dispatch during the year. Besides, it also propelled the 'Swachh Aadat Swachh Bharat' program in India during the year under review. On 8 September 2015, HUL reported that it has further consented to bring forth an arrangement for the deal and the transfer of its bread and pastry shop business under the brand Modern to Nimman Foods Private Limited, an investee organization of the Everstone Group, for an undisclosed amount.

case study of hindustan unilever limited

Brands And Products Of Hindustan Unilever

HUL is the market chief in Indian buyer items with products in more than 20 purchaser classes (for example, cleansers, tea, cleansers, and shampoos among others). Sixteen of HUL's brands were included in the ACNielsen Brand Equity rundown of 100 Most Trusted Brands Annual Survey (2014) which was completed by Brand Equity, an enhancement of The Economic Times. There are many brands and products owned by Hindustan Uniliver:

case study of hindustan unilever limited

Food Products

  • Annapurna salt and Atta (once known as Kissan Annapurna)
  • Brooke Bond 3 Roses, Taj Mahal, Taaza and Red Label tea
  • Kissan squashes, kinds of ketchup, squeezes and sticks
  • Lipton ice tea
  • Knorr soups and supper creators and soupy noodles
  • Kwality Wall's solidified treat
  • Modern Bread, prepared to eat chapattis and other pastry shop things (presently offered to Everstone Capital)
  • Magnum (ice cream)

Homecare Brands

  • Wheel cleaner
  • Cif Cream Cleaner
  • comfort cleansing agents
  • Domex disinfectant/toilet and bathroom cleaner
  • Rin detergent products
  • sunlight cleanser and shading care
  • Surf Excel cleanser and delicate wash
  • Vim dishwash
  • magic – Water Saver

Personal Care Brands

  • Aviance Beauty Solutions and products
  • Axe deodorant and aftershave lotion and soap and accessories
  • Lever Ayush Therapy ayurvedic health care and personal care products and items
  • International breeze
  • Brylcreem hair cream, hair gel and hair products
  • Clear anti-dandruff hair products
  • Clinic Plus shampoo and oil
  • Close Up toothpaste
  • Dove skin cleansing & hair care range: bar, lotions, creams, and antiperspirant deodorants
  • Denim shaving products
  • Fair and Lovely, skin lightening cream
  • Indulekha ayurvedic hair oil
  • Lakmé beauty products and salons
  • Lifebuoy soaps and handwash range
  • Liril 2000 soap
  • Lux soap, body wash, and deodorant
  • Pears soap, body wash
  • Pepsodent toothpaste
  • Pond's talcs and creams
  • Sunsilk shampoo
  • Sure antiperspirant
  • Vaseline petroleum jelly, skincare lotions
  • Vaseline and relevant products

Water Purifier Products

  • Pureit water purifier

case study of hindustan unilever limited

Business Model of HUL

Hindustan Unilever is an FMCG company that leverages its Direct to Consumer (D2C) business model and has made over 50 billion in revenue, as discovered in 2017. The company has crossed INR 50,000 cr ($6.55 bn) in turnover during FY21, as per the reports on April 2022. HUL is the first pure FMCG brand to hit such a milestone.

The business model of Hindustan Unilever is propelled with the idea of making living sustainable feasible for the masses. With sustainable living, HUL wants to bring about:

  • Bettering the future of the children
  • A future full of confidence
  • A future full of health
  • A future that is better for the planet
  • A future that is better for the farming and farmers of India

The beauty and personal care segment of Hindustan Unilever helps the company see the most profit, while the food and refreshments segment is declared as the fastest-growing segment of the company. Home care is another segment of the company among its 3 primary segments.

The Hindustan Unilever company gets its competitive advantage from the global footprint it has and the track record of the company for enhancing value for its consumers around the globe.

Some of the prominent patterns that are noticeable in the business model of HUL are:

Reverse Innovation

Reverse innovation refers to the process of building products for industrial countries and then adapting them to the emerging markets. The technique of reverse innovation is what is truly wielded by HUL, which has been a prominent inspiration for many other big brands. The 'Knorr Stock Pot’ that the brand came up with is an excellent example of leveraging reverse innovation. This technique was mastered by HUL by taking references from the famous ‘Dense Soup treasure,’ which was the first major example of reverse innovation, launched in China in 2007.  

Focussing on the financially weak

In contrast to the other foreign subsidiaries, HUL ideated to focus on the financially weaker sections of the country, which led them to focus on the majority of the Indian people. Citing the discovery of Wheel detergent powder is one of the examples where Hindustan Unilever created products for the majority of the Indian consumers. Wheel had lower oil-to-water ratio, which enabled Indian to wash textiles even in rivers with hands. Wheel was then made available cleverly by the brand in the local corner shops as well as via door-to-door representatives.

Staying keen on the Triple Bottom Line

While most of the companies solely focus on the profit part of the follow the Triple Bottom Line with only a little focus on the other segments, HUL has a new approach where the brand decided aimed for the other segments, thereby caring for people and the planet.  

HUL largely focuses on the people, including its consumers and others. For instance, the company changed the name of one of its popular products "Fair and Lovely" to "Glow and Lovely", following the All Black Lives Matter movement that raged globally. This instantly made HUL a favourite!  

Significant Distribution Strategy

The distribution strategy that Hindustan Unilever follows is exemplary! It focuses on hyperlocal markets, retail stores, wholesalers, hypermarkets convenience stores, ecommerce, and more. This hugely helps in the promotion of the HUL products and moving them fast to the consumers!

Business Growth In India

FMCG giant Hindustan Unilever Limited (HUL) announced a 15.98% development in solidified net benefit at Rs 6,060 crore for the monetary year finished March 31, 2019, when contrasted with Rs 5,225 crore in 2018. The net profit that HUL witnessed in FY21 rose by 18% YoY at Rs 7,954 crore.

Business Growth Of Hindustan Unilever

Remarking on the profit, HUL Chairman and Managing Director Sanjiv Mehta stated, "We have conveyed a solid execution for the quarter regardless of some balance in rustic market development. Our attention to fortifying the center and driving business sector advancement has been reliably conveying great outcomes. We have now developed top line and primary concern for the eighth continuous year and our 2019 outcomes were a demonstration of both our technique and execution."

Growth Of Hindustan Unilever

"Given the large-scale monetary pointers, close term advertise development has directed. Notwithstanding, the medium-term viewpoint remains positive. As an association, we are well-situated to react with speed and nimbleness to address the issues of our shoppers. We stay concentrated on our vital plan of conveying predictable, focused, beneficial, and dependable development," he included.

"Together with the between time profit of Rs 9 for each offer, the all-out profit for the money-related year closure March 31, 2019, adds up to Rs. 22 for every offer," the organization said. "Combined income for 2018-19 remained at Rs 39,860 crore, up from Rs 36,622 crore a year sooner," HUL said in a document to the Bombay Stock Exchange.

Hindustan Unilever's Volume Growth

HUL's business in India developed by 12%, driven by 10% volume development in the household advertise. In the January-March quarter, the organization posted 13.84% development in its independent net benefit at Rs 1,538 crore when contrasted with Rs 1,351 crore in a similar quarter a year ago. The offers of the organization remained at Rs 9,809 crore in Q4FY19 from Rs 9,003 crore in Q4FY18, enrolling a development of 8.95%. The working benefit (EBITDA) for the March quarter was up 13% year-on-year at Rs 2,321 crore and the EBITDA edge was up 90 bps.

Challenges Ahead Of Hindustan Unilever

The organization said that the edge improved because of judicious administration of instability in costs (unrefined and money driven) alongside improved blend and working influence.

HUL reported that its Earnings before interest, tax, depreciation and amortisation (EBITDA) stood at Rs 11,324 crore, while the EBITDA margin was reported to be 25% during FY21.

Also read : Unknown Facts About Famous Brands | A Case Study

Expected Future Growth

Hindustan Unilever NSE 0.01 % (HUL) may clock 9-10% development in June quarter benefit despite a slight balance in volumes because of value climbs crosswise over classes. IIFL Institutional Equities expects the FMCG major to report a 6% volume development, a slight control from the 7% volume development recorded in the past quarter.

Growth Prediction Of Hindustan Unilever

"Our channel checks give us a feeling that the organization has started value climbs crosswise over classes, (for example, cleansers, espresso), among others. We along these lines gauge a business development of 9%, like the past quarter level. We expect the slight withdrawal in gross edge to be counterbalanced by influence in promotion spending and different costs. In general, EBITDA and PAT are relied upon to develop at 13% and 12%, individually," IIFL said. IDFC Securities expects HUL to report 10.3% to ascend in benefit at Rs 1,728 crore. It sees deals developing at 8% to Rs 10,250 crore.

"We expect 6% volume development and factor in deals development of 11% in home consideration and 7% in close to home consideration portions. Lower advertisement spends (down 80 bps YoY) and commands over different overheads will help EBITDA edges," it stated while proposing edge at 24.3% against 23.7% the previous year. Edelweiss sees income, Ebitda, and benefit development at 7.3%, 8.6%, and 7.7% YoY.

Hindustan Unilever's Performance In Past Years

"We anticipate that HUL's volume should grow 5% YoY on a high base of 12% YoY development. Q1FY18 was affected by GST dispatch thus the best approach to take a gander at volume development is three years' normal, which will be 5.6%. Delicate quality in the second 50% of Q4FY19 proceeded for the full quarter in Q1FY20. Provincial development is presently at a similar level as urban development. A mixed value climb of 2.5% has been taken. On EBITDA edge front, we expect 20-30 bps YoY development," the business said.

What is Hindustan Unilever origin?

Hindustan Unilever or Hindustan Unilever Limited (HUL) is an Indian subsidiary of Unilever, which sprung from its Dutch-British roots. HUL is headquartered in Mumbai.  

Who is the owner of Hindustan Unilever Limited?

HUL is owned by Unilever, its British multinational parent, headquartered in London.

What is HUL?

HUL is the acronym for Hindustan Unilever Limited.

Who are Hindustan Unilever founders?

Hindustan Unilever founders can be cited as 3 parent companies - Hindustan Vanaspati Mfg. Co. Ltd., Lever Brothers India Limited, and United Traders Limited, which were merged to form HUL.

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></center></p><h2>Hindustan Unilever Limited (HUL) Case Study: Key Acquisitions, Business Model, Financials, and SWOT Analysis</h2><p>Hindustan Unilever is a household name; almost every product in your bathroom was made by HUL. Today, we’ll explore its business model to understand its operations.</p><p>Table of Contents</p><p>Hindustan Unilever was founded in the latter part of the 1980s. The Lever brothers, established by William Hesketh Lever, first entered the Indian market in 1888 with a product known as sunlight soap. However, the soap was marked with the phrase “Made in England by Lever Brothers”.</p><p>Hindustan Vanaspati Manufacturing Company, Unilever’s first Indian affiliate, was founded in 1931. Lever Brothers India Limited followed in 1933, and United Traders Limited followed in 1935. In 1956, these companies amalgamated to establish Hindustan Unilever Limited.</p><p>The company’s headquarters is located in Mumbai. Rohit Jawa took over as CEO of Hindustan Unilever Limited in June 2023, replacing Sanjeev Mehta.</p><p>After Hindustan Unilever Limited was founded, its primary focus was on acquiring Indian brands that were already well-established.</p><h2>Key Acquisitions</h2><p>1984 – Brooke Bond, a tea brand.</p><p>1972 – Lipton, a national tea product manufacturer.</p><p>2015-16 – Indulekha, a premium hair oil brand.</p><p>2019-20 – GSK, a healthcare product manufacturer.</p><p>2019-20 – Vwash, a female intimate hygiene product manufacturer</p><h2>Awards and Recognition</h2><p>2023 – Winner of the KPMG ESG Excellence award across India’s consumer market sector.</p><p>2022- Outstanding Company of the Year by CNBC –TV18</p><p>2021 – Best Governed Company Award</p><p>2021- Sustainable Factory of the Year award.</p><p>2020 – Top performer in the FMCG Category</p><p><center><img style=

Market Capitalization

As of 7 th Feb 2024, the total market cap of Hindustan Unilever is around 68.69 billion dollars.

At the beginning of 2007, the market cap of HUL was just 7.28 billion dollars. 

Whether a food and beverage product or a healthcare item, Hindustan Unilever is used by nine out of ten Indian households!

The products of Hindustan Unilever are as follows

1.  Home care products – Laundry detergents, fabric conditioners, dishwashing liquids, and toilet cleaners. (Surf Excel, Rin, Wheel)

2.  Personal care products – Soaps, shampoos, skin care products, hair care products, deodorants, oral care products. (Lux, Sunsilk, fair & lovely, Tresemme, axe and closeup, etc.

3.  Beverages – Tea. (Lipton, brooke bond)

4.  Foods – Packaged foods.

5.  Water Purifier – Pureit water purifier.

6.  Healthcare products – Health drinks. (Boost, Horlicks)

7.  Baby care products – Baby soaps, shampoos, and body lotions. (Dove, Johnson’s Baby)

8.  Cosmetic – Cosmetic and beauty products. (Lakme) 

Business Model and Marketing Strategy

The company’s wide range of products enables it to hold the top spot in the market for industrial consumer goods. They have well-known brands in several areas, and their revenue is greatly influenced by consumer recognition of their brands.

Its primary focus is innovation; a sizable amount of its revenue is allocated to creating new items and enhancing its existing line of products.

HUL has an extensive distribution network that reaches both rural and urban locations. Additionally, they invest heavily in all forms of promotion, including print, digital, and sponsorship.

They typically focus on comprehending customer demands and needs because this enables them to develop product lines that cater to consumer preferences

Branding Strategy

What’s in the name? Though everyone has heard this saying at some point in their lives, it is essential to remember that reputation and brand are everything. The company employs various graphics and logos for its many products, but its distinctive logo is printed on each one, making it easy for the general public to recognize them.

Let’s take a close look at the company’s finances to better understand its success.

Based on the aforementioned financial data, it is clear that the company’s revenue as well as profit has been increasing in the last 3 years.

Let’s now examine the company’s balance sheet year over year to examine its financial situation.

The company’s current assets have increased while the non-current assets have shown a small increase as compared to current assets.

If we compare that with the data from 2022, however, non-current liabilities have fallen and current liabilities have increased.

Shareholding Pattern

As of December 2023, the company’s promoters own over 61.9% of the company’s shares, while Domestic Institutional Investors hold about 12.3%, Foreign Institutional Investors (FIIs) account for roughly 13.64%, and the public owns 12.08% of the company’s shares.

SWOT analysis

case study of hindustan unilever limited

1.  The company’s primary strength is its widespread presence in India, with more than 8 million locations where customers can purchase its product. Its supply chain is excellent, well-managed, and efficient.

2.  HUL has a long history , which they can preserve because of the money they currently spend on product development and research.

3.  The company’s financial outcomes demonstrate the impact of its excellent performance.

1.  A company’s market share might be reduced by any business that focuses on a certain product.

2.  Since more and more consumers are turning to herbal items, the corporation may suffer from the lack of any Ayurvedic or natural products in its product line.

3.  Due to its extensive product portfolio, HUL may encounter difficulties in effectively managing and allocating resources to it.

Opportunities

1.  The country’s population is likely to have more disposable income in the next few years, which will cause the FMCG sector to grow significantly .

2.  The business can quickly buy out companies that manufacture goods outside of its current product line, which will aid in product diversification .

3.  They can expand their customer base and increase revenue by utilizing e-commerce platforms.

1.  The business operates in a highly competitive market , and with the advent of globalization, numerous international brands have established themselves in the country.

2.  Their margins may be impacted by regulatory changes made by the Indian government on food packaging ingredients, labeling, etc.

3.  A downturn in the nation’s economy may affect consumer buying habits, affecting a company’s profitability.

The organization has achieved global recognition through its strategic planning and marketing approach. The economy’s overall performance determines HUL’s success, as does the population’s disposable income, which increases company profits.

We have tried to clarify every statistic and data about HUL in this case study, covering everything from their financials, history, and shareholding patterns.

However, always consider your risk tolerance and time horizon before making any investing decisions.

Frequently Asked Questions (FAQs)

Q1. Where is the headquarters of Hindustan Unilever located?

Ans. The headquarters of Hindustan Unilever is located in Mumbai, Maharashtra, India.

Q2. What was Hindustan Unilever’s former name?

Ans. Hindustan Vanaspati Manufacturing Company was the former name of Hindustan Unilever Ltd.

Q3. How many factories of HUL are there in India?

Ans. HUL currently has 29 factories nationwide.

Q4. How many businesses are part of Hindustan Unilever?

Ans. There are more than 50 brands connected with Hindustan Unilever.

Q5. What is HUL’s market capitalization ranking in the FMCG sector?

Ans. Hindustan Unilever ranked at the top among FMCG companies, having a market capitalization of around 6.05 Lakh Crore INR as of 7 Feb 2024.

Disclaimer: The securities, funds, and strategies mentioned in this blog are purely for informational purposes and are not recommendations.

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Winning in many Indias: Lessons in growth from Hindustan Unilever

Published: 31 August 2021

Hindustan Unilever (HUL) is one of India’s top five most valuable companies. Chairman and Managing Director Sanjiv Mehta shares six of the ways HUL grew to meet the needs of the Indian market and what’s in store for the next decade

Man and two young women planting sapling plants in a field

‘What’s good for India is good for Hindustan Unilever’ was one of the key outtakes from Chairman and Managing Director Sanjiv Mehta speech at the company’s Annual General Meeting which was held virtually this year. A statement undeniably confirmed by the company’s growth over the past decade.

Over a ten-year period, Hindustan Unilever (HUL) has added 26,000 crore rupees (€3 billion) to its bottom line and doubled its turnover to 45,000 crore rupees (€5.1 billion). It has also increased its market capitalisation nine times to end the decade at more than 570,000 crore rupees (€65 billion). HUL is now the second-largest Unilever business in the world.

Read on to find the six lessons for growth the Chairman shared with the audience and some of the company’s plans to ensure that HUL continues winning in the next decade.

1. Leveraging the power of purpose

In 2005 Surf was HUL’s fifth-largest brand. Today it’s No.1. The first ‘Dirt is Good’ campaign for the detergent was based on the premise that ‘if while doing something good, you get dirty, then dirt is good’. The message worked because the brand’s purpose and performance aligned.

“To win in the next decade we know being purpose-led is not enough,” says Sanjiv. “We have to be future-fit – by being fully digitised, more innovative and faster to respond to the many changes shaping people’s lives every day.”

And this is already being seen in the work HUL’s brands are doing today. Across its beauty and personal care portfolio, Dove has used real-life stories to challenge societal expectations through its #StopTheBeautyTest campaign. And on Women’s Day, Clinic Plus launched a new campaign pledging to educate women to stand up against domestic violence.

2. Shaping categories of the future

During the past decade, steady growth in the Indian economy has seen an emerging middle class with evolving consumer needs and aspirations. HUL has met them through strategic acquisitions, launches and new product formats.

HUL’s acquisition of Indulekha hair oil strengthened its presence in the Premium Naturals segment and the brand has seen sixfold growth in the five years since its purchase.

HUL has also added famous brands such as Horlicks and Boost to move into the growing nutrition space. As a result, it has become one of the largest Foods and Refreshment businesses in the country.

Covid-19’s impact led to growing consumer demand for health, hygiene and sanitation products, and new products including fabric sanitiser and fruit and vegetable wash. More people doing more household chores themselves also created a surge in demand for dishwashers and saw the launch of the Vim Matic dishwasher range to meet this emerging trend.

Young child helping to load dishes into a dishwasher

A surge in the demand for dishwashers saw the HUL team respond with the launch of a range of Vim Matic products

3. Winning in Many Indias

Knowing what spaces to move into relies on knowing your customer base. “In India, dialects, customs and rituals change every 100km. To look at a country as diverse as India as one homogeneous entity is a gross under-service to the vast cultural and business opportunity it presents,” says Sanjiv.

So HUL created its ‘Winning in Many Indias’ (WIMI) model, which classifies the country as 15 consumer clusters to provide insights into product development and marketing. These are supported by 16 country category business teams that function as micro-organisations to reduce the time taken to land innovations.

One example of the model’s success is how it enabled Lifebuoy to ramp up capacity 30 times and launch 17 hand sanitiser variants in just 100 days during the 2020 pandemic. WIMI helped the team capture data and understand where demand for the product was needed most. It provided the insights to develop different SKUs, packs and labels which in turn modernised the brand to meet new consumer needs. As a result, Lifebuoy grew by 1,000 bps, and the strong demand for Lifebuoy sanitiser and handwash remains.

Group photo of different formats of Lifebuoy hand sanitiser products

Capturing local data and insights helped Lifebuoy launch 17 different hand sanitiser variants in 100 days

4. Creating inclusive growth

The drive for inclusive growth for all of India has seen HUL manufacture brands in 29 different factories in remote areas. It has also worked to enable more women to join the workforce through initiatives such as Project Shakti, which has created 136,000 women micro-entrepreneurs across 18 states.

To protect and sustain natural resources, Hindustan Unilever Foundation (HUF) has worked with villages and partners to enable more than 1.3 trillion litres of water potential through improved water management, inspired by its ‘Water for Good’ programme.

And today, 100% of HUL’s electricity is certified renewable, and it’s making solid progress with thermal energy. “We have also stepped up our efforts in plastic waste management,” adds Sanjiv. “We have collected and safely disposed of more than 100,000 tons of post-consumer plastic waste and have committed to collect and safely dispose of more plastic waste than that used in our packaging, as from this year,” he says.

Inclusive growth is a key drive of HUL’s workplace culture, too. “Women make up 42% of our managerial workforce and in a few more years we will achieve gender parity,” explains Sanjiv. “We have also set up accessible workspaces for people with disabilities, introduced a paternity leave policy and included same-sex partners in our medical policy to create a workforce that is truly diverse.”

5. Designing a digital backbone

“Data-driven, analytics-led and AI- and machine-learning-powered technology that leverages automation and builds intelligence over time will be the bedrock of this ‘intelligent enterprise’ – and will drive HUL’s growth in this decade,” says Sanjiv. “It’s the backbone of a digital strategy that will bring its traditional suppliers and consumers with it.”

“HUL has the strongest foothold in traditional trade, and we believe wiring this up will give us competitive advantage,” he explains. To this end “we are digitising the entire customer journey from demand capture to demand fulfilment. At the core is the digitisation of distributor operations, AI-based order capturing followed by the next layer of intelligent operations including recommendations, replenishment-based ordering, delivery route optimisation and dynamic beat optimisation,” he says.

It’s already bringing results. Shikhar is HUL’s eB2B app which connects sales teams with more than 500,000 stores that stock Unilever products. During the pandemic it ensured orders were received when the sales team couldn’t reach the outlets during lockdowns. It also helped optimise deliveries. By using location data to triangulate, it calculated the best possible routes to reach stores that avoided containment zones and other restrictions.

Retailer using app on a smartphone to check stock

More than 500,000 retailers are now connected to HUL’s Shikhar app, which has helped them order and keep their shelves stocked with essentials during the Covid pandemic

6. Focusing on a future-ready workplace

“New levels of uncertainty and volatility require us to build new muscles that will help us to truly lead from the front while addressing changes. This requires a fundamental shift in the way we work and the way we help our talent develop to face the challenges of the future,” says Sanjiv.

Alongside investment in a digital transformation programme, “we established a Digital Council comprising cross-functional leaders, which facilitates digital experiments across the company,” he adds.

“Our Digital Transformation Lead works to see how technology can positively impact business while the Chief Data Officer is working on building data pipelines and laying the foundation of a data-rich company. We are also leveraging AI for recruitment and cognitive computing and using NLP for a variety of purposes.

“At the same time, we have been transforming how we work at HUL by introducing more flexible ways of working. Last year, we embarked on a holistic programme of redeployment, moving people to teams that needed more resource to meet the rising demands of the time,” he adds.

Building back better

The pandemic has pushed businesses to break new ground and reimagine the future – an equitable, sustainable and purposeful one. It has put organisations like HUL – an integral part of most households in the country – in a position of great responsibility.

“It will take concerted efforts from governments, businesses and individuals to commit to an equitable and sustainable future. Hindustan Unilever is geared to walk that path,” says Sanjiv.

“As the former UN Secretary-General and Nobel Peace Prize laureate Kofi Annan said: ‘Our biggest challenge in this new century is to take an idea that seems abstract – sustainable development – and turn it into a daily reality for all the world’s people.’”

“It is for us to make sure that it becomes a reality in this decade,” he says.

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A Case Study on Hindustan Unilever Limited (HUL)

Hindustan Unilever Limited (HUL)

Article Overview

Introduction

Hindustan Unilever Limited (HUL) is one of India’s wide-ranging consumer goods companies, spreading with two out of three people of Indian with above 20 wonderful categories in personal care products, home as well as meals & beverages. They provide the Company with combined volumes of an estimated four million tones and income of more than Rs. 13,000 crores. The HUL is likewise the U.S.A.’s Major exporting country; through the participation of the Indian authorities, it is recognized as a very famous gold trading center. The Anglo-Dutch company’s junior leverage holds a 52% majority stake in Hindustan Unilever Co. Ltd. In 1888, when the box was picked up during the day, the Lever Brothers started their royal business in India, cleaning soap bars enchase with the phrases like “ Made in England with the aid of Lever Brothers ” had been transferred to the Port of Kolkata and is the beginning of a generation of fast-paced product advertising and marketing of FMCG in HUL which When the Leverage Brothers India was suspended in 1933 and established in 1956, its shape changed to Hindustan Lever restrained with a combination of Lever Brothers, United buyers Ltd and Hindustan Vanaspati Mfg. Co. Ltd. The company is headquartered in Mumbai, India, powers more than 15,000 workers, and indirectly employs more than 52,000 employees. In the months of June 2007, the company changed its name to Hindustan Unilever Co. Ltd. The main motive of carrying out the case research changed into to seriously examine various characteristics of operating of these companies in popular and methods followed for accomplishing strategic pliability . These studies are carried out in stages based on evolution to Pursue strategic agility through the dynamic talents of excellent manufacturing companies. In addition, it examines popular popularity, general performance indicators, and economic indicators, as well as dynamic skill systems. an in-depth evaluation of the research has been completed and their consequences have portrayed the industrial framework concerning the research objective. 

Business Strategy of HUL

HUL’s nutrients strategy specializes in better products, better diets, better lives, and better products. Here Good products have a long history in HUL. They have got a protracted background in contributing definitely to humans’ diets. Their brands which include Knorr and Lipton have supplied healthful and terrific-tasting merchandise for over 100 years. They have got set ambitious vitamins goals which might be embedded into the enterprise and R&D approach. 

Related Article: Deepinder Goyal: Delving into the Business Strategies of Indian Food Delivery King

Nutrition Strategy of HUL

Better merchandise :.

They usually enhance the nutritional nice of our merchandise even as now they can not compromise on taste. The Lipton tea and Brooke Bond Purple Label are delicious, healthy drinks that refresh and moisturize. kids’ fit to be eaten Frozen or Ice Dessert products have strict vitamins standards. They also are gradually reducing the sodium content material of  Kissan ketchup/sauces and Knorr Soups portfolio to get the sodium benchmarks in line with Unilever’s maximum nutrition standards. 

Better Nutrition :

Through their advertising, they inspire more nutritious cuisine. They sell wholesome recipes on the product % and online. They have constantly supported and keep lending our support to mothers in making scrumptious yet wholesome food for his or her youngsters. 

Better Lives :

Their campaigns inspire human beings to undertake more healthy diets and existence, for instance, the Lipton green Tea ‘domestic to domestic, The facts of fats’ marketing campaign . 

Company facilities of HUL

Hindustan Unilever owns 45 foremost units and has over 50 1/3 birthday celebration gadgets in India with quite a number 65 brands crossing 20 awesome classes inclusive of food and healthcare , skincare, soaps, shampoos, detergents and pores, kinds of toothpaste, tea, cosmetics, coffee , water purifiers, and deodorants,  etc. Its principal portfolio consists of main household manufacturers including Lux, Surf Excel, Lifebuoy, Rin, fair & cute, Wheel,  Pond’s, Lakmé, Vaseline, Dove, Sunsilk, hospital Plus, Pepsodent, Closeup, Brooke Bond, Bru, Kissan, Kwality Walls, Knorr, Pureit and awl. The organization has over 16,000 personnel and has an annual turnover of around Rs.21.736 crore (FY 2011-2012). HUL is a subsidiary of Unilever, one of the global’s leading providers of rapid-moving consumer items with sturdy nearby as the company is rooted in more than 100 countries around the world, with annual sales in 2011 of approximately 46.5 billion euros. Unilever owns approximately 52% of HUL. 

Financial Growth of HUL

It is observed that 44% of the organization’s sales come from beauty and personal care , accompanied by using domestic Care (34%). foods & Refreshment contributes 19% and handiest three% comes from others. In terms of working income, beauty and personal care products make a contribution the most (55%), 29% get home care, and 14% and 3% from food and other things. In the skincare phase, employers occupy 54% of the market, making it the market leader. In Dishwashing Detergents, 55% of the marketplace proportion is dominated by using the agency. 47% and 37% is the respective marketplace proportion which agency owns in Shampoo and private Care phase. As of September 20, the company has issued 9.79% of the total income which has shown an increased spike in total sales as of 20th June. Internet profit Margin for the business enterprise is 14.77% in FY20, up from 13.59% in FY2019 contemporary NPM is the best of that inside the remaining 5 financial years and the 3 Yrs. Avg. internet earnings Margin is 14.26%. HUL net earnings Margin In FY20, HUL confirmed a sales increase of 1.2% from the preceding FY. 3-year CAGR is 6.16%, which means that sales growth this year is moderate. A comparable fashion is visible from the internet earnings boom, 1-12 months CAGR is eleven.46% whereas 3-yr CAGR (14.66%) is higher. HUL as a fall, look at sales profit and bottom line. The employer has completely healthy and regular coins that go with the flow from working sports. Outflow in coins waft from financing sports surged in FY20 as the agency paid a better dividend than the preceding 12 months.

The SWOT Analysis of HUL

HUL has a strong logo equity and a huge legacy as it’s miles a very antique and properly-rooted organization with a selection of famous brands and products. The organization has its presence across the duration and breadth of India with over 8 million+ retail stores in which its merchandise is to be had.

HUL runs in a completely competitive environment and there are noticeably hooked up and rising agencies that might be little product-centered and consequently, consume up the market proportion of the organization. HUL presently doesn’t have any ayurvedic or herbal merchandise in their portfolio, that’s a bad element of the business enterprise because the modern populace’s fashion is transferring to natural merchandise and lots of targeted companies are making fine use of it.

Opportunities

With increasing disposable incomes, education, and kids population, the FMCG quarter in rural and semi-urban areas is predicted to develop very rapidly compared to city regions. The agency can use this very well as it already has a brand image and an extensive chain of vendors. The organization can use its healthful cash reserve position and emblem picture legacy to acquire various merchandise to diversify its portfolio.

HUL runs in a rather aggressive surrounding, with 100% FDI allowed via the government of India and new multinational corporations placing their toes, the organization faces an excessive danger from its competitors. The agency is exceptionally dependent on uncooked cloth charges. Inflation can cut back the margins for the business enterprise because it runs in a zone that may be an excessive-quantity, low-margin one. Populace’s shift to natural and healthful products can help a few unorganized and small agencies to grow their marketplace share, which may be a risk to HUL.

Unilever has pursued this advertising and marketing approach since the consumers in developing enterprise sectors are profoundly targeted around value. it could give close-by contenders the brink, besides if an organization can find out a technique to tug in clients with deal costs just as better items. Unilever accepts the reality that productivity improvement should likewise be chargeable for improvement. Unilever’s effective picture advancement program is upheld with a huge degree of showcasing and publicizing physical games which includes a maximum of the media structures. As there are various open doors in the unfamiliar commercial enterprise sectors, yet the inclination of danger is similar to circumstances. The brilliant studies and development (R&D) wing, improved and separate product offerings, and marketplace research are terrific large additives that reason an organization to make the maximum of its latent capacity and extremely good piece of the general enterprise inside the unusual market. To keep up a more fruitful brand an incentive there should be first-rate coordination and incorporation among the emblem chiefs inside the showcasing department.

Also Read : Soaring Through the Skies: A Comprehensive Case Study on Drone Camera and Their Impact on Photography and Videography

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case study of hindustan unilever limited

Hindustan Unilever’s Kissan Uses Outbrain to Drive Video Engagement

Success story.

case study of hindustan unilever limited

Hindustan Unilever Limited (HUL) is India’s largest Fast Moving Consumer Goods company with a heritage of over 80 years in India, touching the lives of two out of three Indians. With over 35 brands spanning 20 distinct categories such as soaps, detergents, shampoos, skincare, toothpaste, deodorants, cosmetics, tea, coffee, packaged foods, ice cream, and water purifiers, the company is part of the everyday life of millions of consumers across India.

Conceived in 2012, HUL’s Kissanpur campaign emphasizes the importance of real, natural experiences. Through fun and educational content, kids are encouraged to connect with nature by sowing seeds and growing juicy tomatoes.

As part of the “100% Real” campaign, the brand also launched the “Kissan 100% Real Blogger” contest, inviting bloggers from the country to share their “100% real experiences” stories of growing up. The contest was followed by a digital film titled “Kissanpur – Real Joy of Togetherness.” Hosted on the website and social media, the short film sought to connect the brand with parents on an emotional level.

Kissan realized the importance of using content marketing to engage with their target audiences, however, developing a great story and message that was appealing through video content alone was not sufficient enough to capture the attention of their audience. They quickly realized the need to integrate their marketing efforts with a content distribution strategy.

With a reach of over 23 million monthly unique visitors on desktop and more coming from mobile in India, Outbrain was the perfect partner for HUL to drive audiences consuming content on premium publisher sites to the Kissan home page.HUL launched a campaign to drive traffic to two pages with same video content:• Earned Media: An article on Storypick covering the video.• Owned Media: The video embedded on the www.Kissan.in homepage.

screenshot

By using Outbrain, Hindustan Unilever’s content marketing campaign delivered the following results by driving audiences from premium publisher sites to the Kissan homepage.

Results by Numbers

  • >122K Video views delivered on the homepage
  • 1:24 Avg. time on site for a 2 minute video

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Comparative Advertising In India: Beiersdorf AG v. Hindustan Unilever Limited

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Global Advertising Lawyers Alliance (GALA) weblink

The High Court of Delhi on May 9, 2024, in Beiersdorf AG v. Hindustan Unilever Limited (HUL) 1 , extensively examined the principles and boundaries of comparative advertising. The case centered around the allegations that HUL's promotional activities unfairly compared its 'Ponds Superlight Gel' with Beiersdorf's 'NIVEA Crème'.

This article analyzes the court's findings on comparative advertising, the applicable legal framework in India, and the global implications for advertisers.

Case Summary

Beiersdorf AG, known for its 'NIVEA' brand, accused HUL of using deceptive comparative advertising tactics. Beiersdorf discovered that HUL's sales representatives were conducting in-mall promotions comparing 'Ponds Superlight Gel' with a product in a blue tub resembling 'NIVEA Crème'. They used a magnifying glass to show that the product from the blue tub left an oily residue while the 'Ponds Superlight Gel' did not. This comparison was claimed to mislead consumers and disparage the 'NIVEA' brand by highlighting a supposed negative attribute (oily residue) of the product in the blue tub.

Beiersdorf AG also highlighted several past instances where HUL and its parent company Unilever had engaged in similar comparative advertising tactics against 'NIVEA' products, particularly in India:

  • 2012 ASCI Complaint : A complaint was made to the Advertising Standards Council of India (ASCI) regarding a TV commercial for 'Fair & Lovely Moisture Plus' cream that impliedly disparaged 'NIVEA' products by pushing a blue jar off the screen. ASCI had upheld the complaint, recommending that the advertisement be withdrawn or modified.
  • 2016 ASCI Complaint : HUL complained against Beiersdorf regarding an advertisement for 'NIVEA Crème', highlighting the ongoing contention between the two companies regarding comparative advertising practices.
  • 2018 Digital Media Advertisement : Beiersdorf's Indian subsidiary complained about a 'Ponds Light Moisturiser' advertisement that compared it to an unnamed product in a blue tub, leading to the ad's withdrawal. The ad was seen as an unfair comparison that misled consumers by not clearly identifying the products being compared.
  • 2019 Instagram Story : A complaint was made about a 'Lakme Peach Milk Soft Crème' Instagram story that compared it to a product with iconic blue packaging, leading to its removal. The blue packaging was again associated with the 'NIVEA' brand, and the comparison was seen as an attempt to disparage the product.

These instances demonstrated a pattern of aggressive comparative advertising by HUL and its parent company, targeting Beiersdorf's 'NIVEA' products within the Indian market.

HUL contended that comparative advertising is permissible under Indian law as long as it does not amount to disparagement. It argued that the blue tub used in the comparison was not exclusively associated with 'NIVEA', and no specific brand was targeted. It further maintained that the comparisons were part of legitimate puffery and competitive advertising practices in India.

The Jurisprudence on Comparative Advertisement in India

In Wipro Enterprises (P) Limited v. Reckitt Benckiser (India) Pvt. Ltd., the Delhi High Court laid down comprehensive principles on comparative advertising in India, summarized as follows:

  • Direct and Indirect Targeting: Comparative advertisements can be permissible if they do not directly or indirectly target the plaintiff's product unless such targeting is inevitable due to the market context. The implication must be clear and not based solely on market share.
  • Truthfulness and Honesty: Advertisements must be truthful and honest. Misleading, false, or deceptive advertisements are impermissible, irrespective of whether they extoll the advertiser's product or criticize the competitor's.
  • Puffery: Puffery is permissible but must be distinguished from misleading statements of fact. Puffery is not actionable as long as it does not mislead consumers about the competitor's product.
  • Disparagement: Denigration of a rival's product is impermissible. While it is acceptable to claim one's product is superior, it is not acceptable to claim the competitor's product is inferior. The advertisement should not convey a message that directly or indirectly disparages the competitor's product.
  • Consumer Perspective: The impact of the advertisement is assessed from the viewpoint of the average consumer, who can read between the lines and is not naive. The overall effect and the impression it leaves on the viewer's mind are crucial in determining whether the advertisement is misleading or disparaging.

Further, comparative advertising is permitted under Section 30(1) of the Indian Trademark Act 1999, which allows the use of a registered trademark to identify goods or services, as long as it is under honest practices and does not take unfair advantage or harm the trademark's reputation.

Furthermore, under Chapter IV of the ASCI Code, comparative advertisements are allowed if they meet certain conditions, such as, clearly stating the aspects being compared, avoiding creating artificial advantage or misleading consumers, using factual and accurate information, and refraining from unfairly denigrating other products or using the goodwill of other firms.

Court's Analysis and Findings

The court agreed that the distinctive blue color used by Beiersdorf for 'NIVEA' products was a well-established source identifier, and noted that HUL could not claim ignorance of the distinctiveness of the 'NIVEA' trade dress. The history of litigation and disputes over comparative advertising between the parties indicated that HUL had knowledge of the association between the blue tub and the 'NIVEA' product.

Further, the court noted that both plaintiff and defendant have different categories of creams, essentially three categories, each of which has a different percentage of fatty matter. HUL chose to compare their lightest product ('Ponds Superlight Gel') to the plaintiff's heaviest product ('NIVEA Crème'). Comparing HUL's lightest product with a specific distinctive blue tub cream, to show that their gel was lighter, without full knowledge being given to the consumer, was held misleading. The court held that a comparison may be made between similar products if the distinguishing feature relates to a parameter that would be different for a different category.

Moreover, the impugned ad was without audio and the lack of verbal communication in the promotional activities left room for consumers to draw their own (misleading) conclusions based on the visual comparison alone and could easily mislead consumers into believing that the 'NIVEA' product was inferior.

Furthermore, the court acknowledged that some level of puffery is allowed in advertising. However, HUL's activities crossed the line into disparagement by creating a negative impression of the 'NIVEA' product. The court emphasized that the deliberate choice of a blue tub and the misleading comparison suggested an intent to disparage the 'NIVEA' brand rather than merely promoting the 'Ponds Superlight Gel'.

Finally, the court held HUL's actions, i.e., choosing to compare the 'NIVEA' products with its own products as prima facie misleading and disparaging.

Our Analysis

The court's ruling provides significant insights into how comparative advertising should be conducted to ensure fairness and truthfulness, while also protecting the interests of competitors and consumers. Particularly, the court emphasized that for comparative advertising to be fair, it must involve products of similar categories. This reinforces the principle that comparisons should not create artificial advantages by juxtaposing dissimilar products. The ruling also highlighted that the overall impression an advertisement leaves on the average consumer is crucial. HUL's promotional activities, which lacked verbal explanation and relied solely on visual comparison, were held likely to mislead consumers. This aspect highlights the necessity for advertisements to be clear and transparent, ensuring consumers are not left to make misleading inferences.

The Beiersdorf AG v. HUL judgment delineates the boundaries of comparative advertising and serves as a comprehensive guide for advertisers to craft their promotional strategies within the legal and ethical frameworks.

Moreover, this case highlights a broader trend in the Indian judiciary, where courts are becoming increasingly proactive in addressing issues related to consumer protection. The Indian courts are not only interpreting the law but also setting clear precedents to ensure that advertising remains a tool for fair competition and consumer benefit, rather than a means of misleading or disparaging competitors. This proactive stance is essential in maintaining market integrity and ensuring that consumers are given true and fair information, which ultimately supports informed decision-making and healthy market competition.

1. CS(COMM) 300/2021

2. 2023 SCC OnLine Del 2958

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