The Hindu Business Line : `Make brands socially responsive, innovative'

Hindustan Lever's Chief Executive Officer, Mr Douglas Baillie, on Friday asked companies to make their brands socially responsive and innovative as part of their growth strategies.

He said India's pyramidal economy is set to metamorphose into a diamond-shape in the next two decades with more and more people moving from lower to middle- and upper-income levels.

Predicting an "explosive growth in income and choices" during the period, he, however, cautioned that strong democracy and world-class infrastructure could alone keep up the current momentum. Brands must address the people's needs and for this India needs to cultivate more and different talents.

Speaking at the Confluence 2006, at the Indian Institute of Management-Ahmedabad, on the theme `India opportunity and the role of social innovation' , he narrated the India growth story in the last few years and projections for the future, adding that "the world has been forced to take notice of this change."

"Now we need more people with an innate and profound understanding of business' social and environmental impact and potential," Mr Baillie said.

Income distribution

He pointed out that the income distribution of consumers in India is changing from a pyramid, where close to 75 per cent are in the bottom rung, to a diamond where more than 50 per cent of consumers would shift to the urban middle class.

The new consumer, especially the urban female, would like to spend on brands, which make her express herself. At the same time, the top end of the segment would have a similar spending power as those in Europe. The current trend in organised retail would increase the share of modern retailing from 3.9 per cent at present to 25 per cent in the coming years. There would be an explosion of choices for the consumer and it represents a huge opportunity for FMCG companies.

He narrated the experience of his company's products linking with social causes and needs. The Lifebuoy Swasthya Chetana programme, started in eight States in 2002 to educate children about personal hygiene, had, by 2005, covered 70 million children across 18,000 villages. "This was not a philanthropic venture and was closely related to business strategy as the health and prosperity of the community that Levers serves is directly linked to the business results."

Growth opportunity

Highlighting that, to be a part of the new growth opportunity, brands needed to recognise not only the needs of their consumers but also address their concerns as the citizens in communities.

He cited the HLL's "Project Shakti" initiative enabling rural women become self-dependent by forming groups that saved Re 1 per day per member and supported each other with credit when required. These Shakti members sell HLL products and save a margin on sales, in an ever increasing number.

Apart from these initiatives, he also narrated the HLL experience with the New Surf Excel Quickwash and Annapurna iodised salt as a result of need of innovation in minimising use of water and eradicating iodine deficiency, respectively.

He emphasised that corporations should now re-engineer their products from the end product that satisfies the needs of the consumer at the price points that they want, which is opposite from the past where corporations used to price the products on the basis of their costs and margins.