HUL centres its growth strategy on young consumers and AI
The move is designed to future-proof its position as India’s largest FMCG player while shifting the portfolio toward higher-margin segments.
INDIA – Hindustan Unilever (HUL) is repositioning its India business around young, digitally native consumers by combining AI-enabled content creation, social-commerce distribution, and a sharper premium-beauty portfolio to drive volume-led profit growth.
The company frames this as its “New India opportunity,” with growth anchored in social media engagement, e-commerce channels, and data-driven marketing that improves media effectiveness.
HUL plans to lift productive capital expenditure to about 3% of turnover from roughly 2% over the past five years, signalling heavier investment in capacity, capabilities, and growth enablers tied to premium categories.
After a two-year lull attributed to a tough operating environment, HUL reports taking “decisive actions” to reset the business for stronger growth, with FY26 EBITDA margins at 23.6%, down around 70 basis points year-on-year.
At its Capital Markets Day 2026, HUL outlined a plan to unlock an additional 500 basis points (5% of revenue) through a richer premium mix, operating leverage, a new multi-year cost-savings program, and AI-led media effectiveness.
The savings are intended to fund further premiumization and market development, with 20% of incremental turnover directed into new spaces as the portfolio is reshaped.
HUL is centering its next growth phase on young consumers, social media, and AI-enabled content—using consumer insights and AI feedback to improve creative output and media performance.
In practice, this means leveraging AI to optimize content for social platforms, test creative variants, and allocate media spend more efficiently to reach Gen Z and millennial audiences where they discover and buy.
The approach aligns with Unilever’s broader “Desire at Scale” strategy, which has sharpened the group’s focus on beauty and personal care.
India’s beauty market has been propelled by premiumization and social-led trends, with e-commerce acting as a key accelerator.
The market is projected to grow from USD 28 billion in 2024 to USD 35 billion by 2028, according to the India Brand Equity Foundation.
HUL’s emphasis on social commerce dovetails with this trajectory: digital discovery, influencer-led storytelling, and platform-native shopping experiences are now central to converting attention into sales among next-gen consumers.
To capture high-growth segments, HUL plans to extend existing brands, introduce more brands from parent Unilever, and pursue “bolt-on acquisitions” that can be absorbed into current businesses to enter new categories quickly.
As part of Unilever’s wider India push, a new fragrance hub opened in Mumbai in June, reflecting the company’s view of India as one of the world’s most dynamic fragrance markets.
The lab is designed to use consumer insights, neuroscience technology, and AI feedback to develop fragrances that resonate with local preferences and support premium growth under the “Desire at Scale” marketing strategy.
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