Hindustan Unilever : Transforming to win in the new India

TRANSFORMING TO WIN IN THE NEW INDIA

was the subject of the speech, delivered by

Nitin Paranjpe, Chairman,

Hindustan Unilever Limited, at the

Annual General Meeting held on 26 June 2023.

TRANSFORMING TO

WIN IN THE NEW INDIA

INTRODUCTION

Albert Einstein had said, "in the midst of every crisis, lies opportunity" - an opportunity to change, an opportunity to grow, an opportunity to become stronger. Often times in history, progress and change have been born out of crises. The cholera pandemic in the early 19th century resulted in a focus on sanitation and hygiene. Similarly, the Spanish Flu that coincided with the First World War resulted in institutionalisation of public healthcare systems across several countries. The world has braved many a crises, and every time, humanity has come out stronger.

Today, we are faced with yet another challenge. According to the World Economic Forum's Global Risks Report 2023, over the long term, the failure to mitigate and adapt to climate change, natural disasters and extreme weather events, biodiversity loss and ecosystem collapse are perceived as being the severest global risks. These long-term risks are likely to be fuelled by an era that is characterised by low growth, low investment and low co-operation, the onset of which, is already being felt by major economies across the world.

Against this challenging backdrop, India, appears to be the silver lining. Earlier this year, World Economic Forum Chief Klaus Schwab had referred to India as a "bright spot in a

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fragile world". Lauding India's efforts on several fronts including climate action, contributions to the global healthcare system and focus on digital public infrastructure, Schwab had remarked that India's G20 presidency had come at an opportune time.

INDIA TAKES CENTRE STAGE

Emerging steadily from the shadows of being a 'poor nation', India has been the fastest growing economy in the last decade and is touted to become the world's third largest economy by 2027, surpassing Japan and Germany. The country's ambition of becoming a high-middle income country by 2047, when the nation celebrates 100 years of independence, is a definite possibility.

A few factors will help the India journey:

Favourable demographics: A growing young population can often translate into a growing economy and India, with one of the world's largest populations of youth, can reap the benefits of its demographic dividend in the years to come. About 66% of the country's population today is below 35 years of age, with 40% of the population in the age bracket of 13-35. The country is predicted to become home to one-fifth of the global workforce, making it a go-to destination for employers from across the world. Further, while the population of other developed economies is aging rapidly, India's population is expected to stay young for longer. If all goes well, this could very well be the century when people aspire to live the 'Indian Dream.'

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Rising consumption: With a growing young population, India is witnessing a significant rise in consumption. There are three key factors that contribute to this increase.

First, is growing affluence. We already have over 46 million relatively affluent households. In fact, the share of the middle class, with an annual income of ₹ 5-30 lakh doubled to over 30% between 2004-05 to 2021-22 and is projected to double again to over 60% by 2047.

Second, is urbanisation. The famous 'India's soul' that lives in its villages is crossing over to cities, in search of opportunities and a better standard of living. In fact, by 2030, more than 100 cities are expected to have populations over one million. At the same time, we see tremendous growth in tier 2, 3 and 4 towns and in semi-urban India, what we address as 'Bharat ke Shehar', which provide a massive and still untapped opportunity for businesses.

Third, is the rapidly growing nuclear family structure. Studies show that younger decision makers in nuclear families spend 20% to 30% more per capita than older ones in joint families, leading to higher consumption.

Enviable digital public infrastructure: India, having missed out on the first and the second industrial revolutions and having been too young a nation to capitalise on the third, is today well-poisedto lead the fourth industrial revolution. This revolution leverages technology in conjunction with physical, digital and biological worlds, and is transforming several sectors across the world. The IndiaStack, a one-of-its-kinddigital public infrastructure, based on identity, payments

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