A

MINI PROJECT REPORT

ON

HINDUSTAN UNILEVER LIMITED

OF FMCG SECTOR
Submitted for the Partial fulfilment of the Requirement of Award of

MASTER OF BUSINESS ADMINISTRATION

(2021-2023)

(AFFILIATED TO AKTU UNIVERSITY, LUCKNOW)

UNDER THE GUIDENCE OF Submitted BY:

Dr. Satendra Soam Abhishek Gupta
(Director) MBA: 2nd Sem

MASTER SCHOOL OF
MANAGEMENT STUDIES,
Meerut Uttar Pradesh
(Affiliated to AKTU, Lucknow)
 CERTIFICATE

This is to certify that the report titled “HINDUSTAN

UNILEVER LIMITED OF FMCG SECTOR” being
submitted by ABHISHEK GUPTA, in partial fulfilment of
the requirements for the award of the Degree of Master of
Business Administration is a bonafide Record of the project
work done of the MBA, Master School of Management
Studies Meerut.

Dr. SATENDRA SOAM

(Director)
 ACKNOWLEDGEMENT

It is really the matter of a great pleasure for me to

undertake and presents this creative and practical work,
a product project report of MBA.
This report has been prepared by keep in mind various
aspects relating to financial capacity of the plant which
is to be an established, the fast growth and development
in the field of strong magnetic strips industry.
I sincerely thank Dr. Satendra Soam (Director) of MSM,
Meerut. for their guidance and encouragement in
carrying out this project work. I would also like to
express my gratitude to all those who have assisted me
during the period of my project work. Finally yet
importantly, the help & support of my friends and
professors have made this venture successful.
Therefore, I would like to thank them all from deep of my
heart.
 EXECUTIVE SUMMARY

FMCG industry products have a quick turnover, and relatively low cost are known as
Fast moving consumer goods. FMCG products are those that get replaced within a
year. Examples of FMCG generally include a wide range of frequently purchased
customer products such as toiletries, soap, cosmetics, shaving products as well as
other non-durables such as bulbs, batteries, paper products and plastic goods.
FMCG may also include pharmaceuticals, consumer electronics, packaged food
products, soft drinks, tissue paper and chocolate bars.

The total FMCG market is in excess of around Rupees 85,000 Crores. It is currently
growing at double digit growth rate and is suspected to maintain a high growth rate.
FMCG Industry is characterized by a well-established distribution network, low
penetration levels, low operating cost, lower per capita consumption and intense
competition between the organized and unorganized segments.
 INTRODUCTION OF FMCG INDUSTRY SECTOR

Fast-moving consumer goods (FMCG) sector is India's fourth-largest sector with

household and personal care accounting for 50% of FMCG sales in India. Growing
awareness, easier access and changing lifestyles have been the key growth drivers
for the sector. The urban segment (accounts for a revenue share of around 55%) is
the largest contributor to the overall revenue generated by the FMCG sector in India.
However, in the last few years, the FMCG market has grown at a faster pace in rural
India compared to urban India. Semi-urban and rural segments are growing at a
rapid pace and FMCG products account for 50% of the total rural spending.

Items in this category are meant for frequent consumption and they usually yield a
high return. The most common in the list are toilet soaps, detergents, shampoos,
toothpaste, shaving products, shoe polish, packaged foodstuff, and household
accessories and extends to certain electronic goods. The Indian FMCG sector is
highly fragmented, volume driven and characterized by low margins. The sector has
a strong MNC presence, well established distribution network and high competition
between organized and unorganized players. FMCG products are branded while
players incur heavy advertising, marketing, packaging and distribution costs.
 TOP INDUSTRY OF FMCG SECTOR

 Hindustan Unilever Limited (HUL)

 ITC Limited
 Nestlé
 Parle Agro
 Britannia Industries Limited
 The Godrej Group
 Amul
 Dabur
 Cadbury India
 Emami Ltd.
SOME COMPANY’S LOGO OF FMCG
 INTRODUCTION OF HINDUSTAN UNILEVER LIMITED

Hindustan Unilever Ltd is a 51 per cent owned subsidiary of the Anglo-Dutch giant
Unilever, which has been expanding the scope of its operations in India since 1888.
It is the country's biggest consumer goods company with net sales of US$ 2.4 billion
in 2003. HLL is amongst the top five exporters of the country and also the biggest
exporter of tea and castor oil. The product portfolio of the company includes
household and personal care products like soaps, detergents, shampoos, skin care
products, color cosmetics, deodorants and fragrances. It is also the market leader in
tea, processed coffee, branded wheat flour, tomato products, ice cream, jams and
squashes. HLL enjoys a formidable distribution network covering over 3,400
distributors and 16 million outlets. In the future, the company plans to concentrate
on its herbal health care portfolio (Ayush) and confectionary business (Max). Its
strategy to grow includes focusing on the power brands' growth through consumer
relevant information, cross category extensions, leveraging channel opportunities
and increased focus on rural growth.
MARKET SEGMENT OF HINDUSTAN UNILEVER LIMITED

 Personal Care: It consists of oral care; hair care; skin care; personal wash
(soaps); cosmetics and toiletries; deodorants; perfumes; paper products
(tissues, diapers, sanitary, shoe care) etc.

 Household Care: It comprises of fabric wash (laundry soaps and synthetic

detergents),household cleaners (dish/utensil cleaners, floor cleaners, toilet
cleaners, air fresheners, insecticides and mosquito repellants, metal polish
and furniture polish).

 Branded and Packaged Food and Beverages: It consists of health beverages,

soft drinks, staples/cereals, bakery products (biscuits, bread, cakes), snack
food, chocolates, ice cream, tea; coffee, processed fruits, vegetables and
meat, dairy products, bottled water, branded flour, branded rice, branded
sugar,juices etc.

 Spirits and Tobacco: An exact product-wise sales break up for each of the
items is difficult
 SCOPE OF FMCG INDUSTRY IN INDIA

 Organizations in this sector have gone up against outrageous rivalry among

themselves over a long time which is unendingly growing. This is regularly
because of the expansion in per capita pay amidst various progressions in
semi urban & rural sector.

 The sector has changed its techniques and chosen for organized exhibiting of
the things to enter both the common and urban markets. The organizations
are contracting progressively people which have headed to an augmentation
inside the work prospects in this division.

 FMCG division in economy is one of the preeminent important sections in

economy.

 Henceforth, FMCG section is making huge business with extraordinary career

possibilities. Advancing, retail, bargains, organizations, and flexibly are the key
zones which produces most noteworthy scope in Industry .
 EMERGING TECHNOLOGIES

 Supply Chain

 The HUL industry is characterized by complex distribution network and

intense competition, forcing firms to constantly work on supply chain
innovation. Although, the basic structure of supply chain in the Indian
FMCG sector has not changed over the years.

 Micro-economics play an important role in the supply chain structure of

India. The Indian FMCG sector is a low margin business, where success
mostly depends on the volume of products sold. In order to develop and
maintain an efficient supply chain, the companies focus on availability of
products in the complex distribution network.

 Presence of multiple layers between company and end customer results

in increase in the number of Stock Keeping Units (SKUs), to ensure
availability at the last stage of distribution. In order to increase market
penetration, a growing number of companies are focusing on launching
smaller packaged size products to address needs of consumers present
at the lower end of the economic scale.

 Emergence of modern retail formats have an advantage over small

stores as they are able to demand huge discounts from FMCG
companies. Moreover, a huge emphasis is laid by modern retailers on
ensuring permanent on-shelf product availability during peak periods;
cost optimization and R&D.
 Digital Marketing
 One area that is transforming the industry is digital marketing which
includes multiple aspects such as search engine marketing, video
marketing, social media activity and email marketing. While several
technologies come together for a digital marketing solution and AI is a
key component of the solutions, there are platforms that provide an
end-to-end solution.

 Digital marketing is most effective with a targeted group of customers

and when organisations can identify digital or social champions.

 Blockchain

 HUL companies are investing in Blockchain and digital ledger

technologies for track and trace functionalities and operational
efficiency. The technology not only helps manage the supply chain
better by effective shipping timelines maintenance, delivery
management and inventory management; it also helps build trust
in a brand. It helps in compliance management, reduces the
number or need for middlemen, easier handling of cross-border
transactions and brings about an end-to-end accountability.
  Blockchain also comes into play with loyalty rewards programs. A
blockchain-powered platform can connect loyalty programs
through blockchain nodes, which enables it to collect, exchange
and redeem loyalty points amongst multiple organisations. This
significantly increases interactions without the need for multiple
separate programs or a middleman.

 Artificial Intelligence(AI)

 From predictive analysis to machine learning to deep learning, AI

is bringing a lot of benefits to HUL. AI is enabling companies to
discover gaps (both in their consumer interactions and in the
supply chain) and make their processes intelligent – including
demand forecasting, supply chain optimization, personalised
product offerings, social media analytics, consumer sentiment
analytics and recommendation engines.

 Artificial Intelligence (AI) powered voice-based systems that

support consumers to find goods on e-commerce platforms are
gaining popularity. Voice-activated assistants are now one of the
fastest growing consumer electronic devices. Trend watchers
estimate that the 500 million people using voice-activated
assistants today will be 1.8 billion by 2021 and that 30% of
browsing will be screenless by 2020. For FMCG companies, this
would mean a shift from traditional text searches (visual) to audio
interfaces. 
 CHALLENGES AND ISSUES

 Counterfeiting: Sales of counterfeit products stood at more than

USD1 billion. Counterfeit products have an economy-wide effect on trade,
investment, employment, innovation, environment, and most importantly on
the health and safety of consumers. The counterfeiting issue certainly
encompasses many facets of the economy, including intellectual property
rights (IPR), security concerns, and global trade. Distribution centres, retail
outlets, and third party logistics providers are the most vulnerable to infiltration
of counterfeit products. Some of the technologies used by FMCG players to
tackle counterfeiting include usage of tamper evident packaging, barcodes
with proper standards, barcodes & RFID, laser coding, and optically variable
features.

 Poor supply chain infrastructure: Lack of storage and

transport facilities coupled with rising costs of raw materials and energy has
been a major challenge. Food items tend to have a significantly shorter shelf
life and requires quick delivery systems, regular replenishment of products on
the shelf, and vast different distribution and storage requirements.

 Multiple micro-markets: Multiple micro-markets across

geographies have distinct needs, which triggers category preferences that
vary from state to state and from one district to another. This poses a
continuous challenge for players to balance out the market needs and the
inefficiencies related to customization.

 Large Geographical expanse: Large states in India such

as Madhya Pradesh presents a problem of large distances between two
adjacent markets. This has a crippling effect on viability of channel partners,
which are serving the isolated markets.
 Multiple layers of Taxation: Multiple and inconsistent
taxes levied on FMCG products have made it difficult for the companies to
offer their products at a proper/consistent prices. Implementation of GST
would simplify taxation system in the country. Thereby, reducing the burden of
optimum product pricing amongst the companies.
 OPPORTUNITIES AND GROWTH

 Rural Market: Rural consumption of HUL products has outpaced

urban consumption with the percentage increase in monthly per capita
expenditure in rural markets surpassing its urban counterparts. It has a strong
distribution network in rural India and are benefitting from the contribution of
technological advances such as internet and better logistics services.

 Innovative products: Indian consumers are highly adaptable to

new and innovative products. As Indian consumers become increasingly
exposed to global products, their demand for innovative products has been
increasing, which is resulting in higher R&D expenditure by the leading market
players.

 Premium Products: With growing disposable incomes, middle

and upper middle class income consumers in urban areas have shifted their
purchasing trends from essential to premium products. Premium brands are
manufacturing smaller packs of premium products. In response, firms have
started enhancing their premium products portfolio.

 Inorganic growth strategies for a wider

footprint: Companies are entering into partnerships that will help them
to cater to the market, and improve their distribution networks and skills to
deliver to the last mile. The domestic companies have been quite active in
M&A activities in order to gain significantly from an inorganic growth route.

 Low market penetration: Most of the household and

personal care products sold in India still have low market penetration in rural
and semi-rural areas. This offers a wide opportunity for market players to tap
these markets by offering low cost, small packaging products.

 FINDINGS AND EVALUATION

HUL Products consumption

1.6

1.4

1.2

0.8

0.6

0.4

0.2

0
UK Brazil Thialand India
 CONCLUSION

What does all this mean for the future of HUL industry in India? Undoubtedly, all this
is good for the consumers, who can now choose a variety of products, from a
number of companies, at different price points. But for the players who cater to the
Indian consumer, the future brings a lot more competition. In this environment, only
the innovators will survive. Focus will be the key to profitability (ala HUL). From an
investor’s point of view, Indian FMCG companies do offer long-term growth
opportunities given the low penetration and usage in most product categories. To
choose the best investment opportunities look at the shapers (i.e. innovators) that
have been constantly proactive to market needs and have built strong, efficient and
intelligent distribution channels. Management vision to growth is the key, as
consumers going forward are likely to become even more sophisticated in their
demand.

One, invest in expanding the distribution reach far and wide across India to enable
market expansion of FMCG products. Secondly, upgrade existing consumers to
value added premium products and increase usage of existing product ranges.