Unilever CEO Warns Rising Costs Could Challenge Smaller Rivals in India
Rising costs may hit smaller local Cos, says Unilever CEO Fernando Fernandez
The Economic TimesImage: The Economic Times
Unilever CEO Fernando Fernandez cautioned that supply chain disruptions and increasing crude oil prices may impact smaller local competitors in India, potentially reducing price competition among larger consumer goods firms. He noted that Unilever is poised to implement gradual price increases while capitalizing on growth opportunities in the home care sector.
- 01Supply chain disruptions and rising crude oil prices could benefit larger firms like Unilever by easing price competition.
- 02Unilever expects to implement gradual price increases in home and personal care categories.
- 03Local brands may struggle to cope with rising costs, allowing Unilever to gain market share.
- 04The company has increased its direct outlet coverage by approximately 200,000 stores in India.
- 05Emerging channels like quick commerce and modern trade are contributing significantly to growth.
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Unilever CEO Fernando Fernandez highlighted the potential challenges smaller local companies in India may face due to supply chain disruptions and escalating crude oil prices. These factors could ease price competition, benefiting larger consumer goods firms. Unilever anticipates total inflation costs between $750 million and $900 million this year, assuming crude prices average $100 per barrel. The company plans to implement gradual price increases in its home and personal care categories, while avoiding becoming uncompetitive. Unilever's CFO, Srinivas Phatak, noted that the company gained 400 basis points in market share in body wash, as local brands struggle with rising costs. Additionally, Unilever has expanded its direct outlet coverage by about 200,000 stores in India and is witnessing rapid growth in new channels such as quick commerce and modern trade, which are becoming significant growth drivers.
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The rising costs may lead to higher prices for household products, affecting consumers' budgets. Local brands may face challenges in maintaining competitive pricing, which could impact their market presence.
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