ECONOMY

HUL Launches UShop App To Directly Sell Products To Customers

India’s largest consumer goods maker is live testing its digital store as the Covid-19 pandemic prompted people to turn online to buy everything from groceries to medicines.

“UShop, a webstore, is being tested in Delhi and Mumbai to facilitate digital commerce for the brands,” Hindustan Unilever Ltd. said in an emailed statement to BloombergQuint. “The in-market tests have led to some early learning and we are now in the process of scaling this to more cities that will allow us to increase serviceability to our consumers.”

The pandemic, HUL said, has led to an uptick in e-commerce penetration with many first-time shoppers. “UShop will meet the needs of our online shoppers, allowing them to buy some of our brands with the trust of authenticity and promise of proper service.” This direct relationship with consumers, according to the company, will also help to “build more personalised brand experiences”.

According to two people privy to the matter, the fast-moving consumer goods company’s online store has been live for the last three months.

The app has more than 10,000 downloads on Android’s Play Store. HUL, however, clarified that UShop won’t be integrated with its Shikhar app — an online business-to-business platform for retailers to place orders.

Sanjiv Mehta, chairman and managing director at HUL, after announcing its results for the quarter ended March 2021, told investors that the company’s contribution from e-commerce stood at 5-6%, and the profitability of this channel is higher than modern trade, comprising supermarkets and hypermarkets.

The launch of the company’s UShop app and website comes after it tied up with Reliance Industries Ltd.’s Jiomart for distribution of products — a move that saw protests from traditional distributors, who dominate India’s retail supply chain with nearly 90% share.

Phillip Capital, citing HUL’s annual investor meet, said the company is planning to use data at all levels of its supply chain — demand generation (e-commerce, UShop); demand capture (Shikhar, which helps in digitisation of general trade and partnering banks, financial institutions for working capital requirements); and demand fulfillment (ensuring last delivery, usage of data and analytics, which help in optimisation of operations).

“The management expects the initiatives to fuel innovation, generate efficiencies and drive new category development based on consumer insights received on real time basis,” the brokerage said in a report. “Moreover, buzz word of artificial intelligence and machine learning were used multiple times. We completely trust HUL’s management in driving best in class growth based on past track record.”

Phillip Capital also said HUL was making the company’s future fit to take direct-to-consumer brands across categories by imbibing digital-first culture among existing employees and hiring talent to address the challenge. “Due to intense competition in the beauty and personal care category, the company has set up separate team dedicated on coming up with digital-first launches, where prototyping of new product development will be done much faster based upon current consumer insights.”

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