HLL sees organised retail bringing 35% sales in years ahead

HLL sees organised retail bringing 35% sales in years ahead

Author | Source: The Economic Times | Saturday, Nov 25,2006 8:39 AM

HLL sees organised retail bringing 35% sales in years ahead

FMCG major Hindustan Lever (HLL) expects the share of its business from organised retailers to go up from the current 3% to 35% in the next few years.

“Some may say it would rise to 40-50%. But we feel, it would be around 30-35%. Organised retail will be a big booster, but the kirana shops will not disappear completely,” HLL chief executive officer Douglas Baillie said at an IIM-A function on Friday.

The company, Mr Baillie has been heading since March this year, has been a favourite with IIM-A graduates for decades, but in recent years, foreign I-banks, offering plum jobs, has taken the spotlight. Not without reason, Mr Baillie, HLL's first expat boss in more than 50 years, admitted that going forward the company needs to change its recruitment policy on the campus and emerge as a more attractive employer than chase best grads.

He has enough reasons to feel he will not go wrong. Data he produced showed that by '13, India will house 11m rich households as compared to 3m in 2003, 124m aspiring households (46m) and 96m strivers (131m). This will open up massive opportunities.

“While currently there is a good demand at the top and the middle level, those at the bottom of the pyramid are also fast discovering new brands,” Mr Baillie said. In seven years, the Indian market, he said, would look like a diamond.

Mr Baillie repeatedly endorsed the India growth story. “India is the place to be. There will be income explosion in the years to come. In fact, the income of the top 10m people in India will be four times the turnover of Unilever and Procter & Gamble,” he said. To maintain their current growth rate, they will soon overtake Japan and the UK to join the US as the world's largest economies, he added.

While HLL is already strengthening focus on the emerging markets, mainly the rural India, Mr Baillie also stressed on social innovation.

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