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Resource centre on India's rural distress
 
 

Stress in villages, but growth in cities, says Hindustan Unilever CEO - Sagar Malviya

Economic Times

Unilever global chief executive Alan Jope said high inflation impacted demand from low income consumers in Indian villages even as growth remains stronger in cities.

"The market growth in India remains stronger in urban areas than in rural areas and that reflects the high impact of high food inflation on low income consumers. We are seeing rural markets broadly flat in value terms with lower volumes," Jope said during its earnings call. "But we remain confident that we can continue to grow ahead of the market in India."

For Unilever, India is the second biggest market in revenues after the United States. Over the past few months Hindustan Unilever has slashed prices of soaps and tea. The company has also said that it will focus on high margin products instead of building volume sales at the cost of profit. For instance, Jope said that the Indian tea market has shifted to low price, low margin, powdered tea, where HUL is not competing. But the company is gaining share in the premium tea segment. 

Most companies including Marico, Dabur and Godrej have recently said that rural consumption is yet to pick up and there has been some stress in discretionary spending in urban areas since Diwali.  

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