Unilever, a significant player in India’s premium product market, plans to reduce prices in the near future.
The move is in response to a softer pricing strategy being considered by leading fast-moving consumer goods (FMCG) companies in India.
Unilever, the parent company of Hindustan Unilever in India, has made an official announcement regarding these changes.
Unilever’s Chief Financial Officer, Graeme Pitkethly, has indicated that certain product categories in India may witness price reductions as the global economy recovers.
However, he emphasized that these price cuts will be limited to specific product categories, and other segments will not see price reductions.
Which Product Categories Will See Lower Prices?
According to reports from Economic Times, Reuters, and Business Standard, Unilever is planning to reduce prices in the fabric cleaning and skin cleaning product categories.
This decision is primarily driven by two factors: first, the decrease in global commodity prices, which allows for cost savings to be passed on to consumers,
and second, the need to compete with local brands reentering the market and gaining market share.
Revised Strategy to Maintain Profitability
During Unilever’s third-quarter earnings call, CFO Graeme Pitkethly explained that the company is only considering adjustments in pricing to stay competitive and maintain profits.
In the last quarter, Hindustan Unilever reported a total profit of Rs 2,656 crore for July-September, which reflects a 0.3 percent decline compared to the same quarter the previous year when the profit was Rs 2,665 crore.
Rise of Indigenous Brands in Soap, Detergent, Hair Oil, Tea, and Biscuits
Indigenous brands have been gaining prominence in the soap, detergent, hair oil, tea, and biscuits markets, impacting Unilever’s market share.
Over the past two quarters, consumer companies have been reducing prices, especially for soaps, detergents,
and tea, due to falling commodity prices. Local brands are passing on these cost savings to consumers.
