Quick Commerce To Contribute 10-15% To HUL’s Revenue: Unilever CEO

SUMMARY

At a recent event at Barclays, Fernandez said that the contribution of quick commerce to ecommerce sales has been doubling year-on-year in India, albeit on a small base

The CEO said that while quick commerce accounts for 2% of HUL’s revenue, he expects this to jump to 10% to 15% in three to four years

"I prefer quick commerce to marketplace in terms of channel development... quick commerce is a limited assortment channel. For a company like us, it’s a good development channel,” he added

Amid the rising popularity of quick commerce in the country, FMCG giant Unilever’s new chief executive officer (CEO) Fernando Fernandez has said that the channel would contribute 10% to 15% of the revenue of its Indian subsidiary Hindustan Unilever Ltd (HUL) in a few years.

At a recent event at Barclays, Fernandez said that the contribution of quick commerce to ecommerce sales has been doubling year-on-year in India, albeit on a small base. The development was first reported by ET.

The CEO said that while quick commerce accounts for 2% of HUL’s revenue, he expects this to jump to 10% to 15% in three to four years.

“India is a very special place because richer Indians and poorer Indians live in close proximity that basically provide demand and supply of labour, making quick commerce a logical channel to grow,” Fernandez said.

The Unilever CEO also said that the margin mix is better for the quick commerce segment.

“I prefer quick commerce to marketplace in terms of channel development… quick commerce is a limited assortment channel. For a company like us, it’s a good development channel,” he added.

He said that the only category of HUL which is facing headwinds is beauty due to “channel and segment development”. This comes almost a month after HUL announced the acquisition of D2C brand Minimalist for about INR 3,000 Cr to strengthen its beauty and personal care portfolio.

The comments come at a time when the quick commerce sector is seeing exponential growth in India. The three key players in the segment – Blinkit, Swiggy Instamart and Zepto – posted a cumulative revenue of nearly $1 Bn FY24.

However, the space is seeing intense competition, as the likes of Amazon, Flipkart Minutes, BigBasket and JioMart are also looking to grab a share in the fast-expanding market. Recently, Rebel Foods also launched QuickiES to deliver food in 15 minutes.

Besides, a number of new startups like Slikk, Plazza, Blitz, WAAYU, Blip, Zing, and Swish are eyeing specific segments like healthcare, fashion, shoes, and food to carve out their own space in this market.

Last week, Swish raised about $14 Mn (INR 121.8 Cr to be precise) in a funding round from Accel, Hara Global, and Unacademy founder Gaurav Munjal.