Unilever CEO ‘very bullish’ on India; Quick commerce to be one of the primary drivers

New Delhi: The newly appointed Unilever CEO, Fernando Fernandez, is “very bullish” on the growth prospects and the changing consumer preferences in India, the second largest business for the FMCG behemoth. In a fireside chat with Warren Ackerman, Head of Staples Equity Research, Barclays, Fernandez conveyed his optimism for the Indian markets in the long run. 

Discussing the laggards that held back the Indian markets’ growth, Fernandez highlighted the food inflation that had been plaguing the consumption in the country. “Notably, food inflation in India has been exceptionally significant, and as you know, food inflation profoundly impacts approximately 80% of households. In particular, the inflation concerning vegetables has been, frankly, quite extreme,” he said. 

Going forward, Fernandez expects India’s economic environment to get better in the second half of 2025. The key factors shaping this favourable environment, according to Fernandez, is the rise of  “affluent India,” the changing consumer preferences, and the quick commerce phenomenon. 

Explaining his stance, Fernandez said, “I am optimistic that India's economic environment will improve. Specifically, within the second half of the year, there are anticipated significant shifts in India's distribution channels. Moreover, the emergence of affluent India is a very key factor.  I'm very bullish regarding India's long-term prospects, particularly concerning the evolving consumer preferences and the transformations within the distribution channels.” 

Zooming in on the reshaping of the distribution channels, Fernandez pegged the conversation to the rise of quick commerce in the country. While the current share of Unilever’s quick commerce sale is 2%, Fernandez expects it to rise to 15% in the next three years.  

“India's unique socioeconomic landscape, where affluent and less affluent populations reside in close proximity, facilitates a dynamic labor supply and demand, making quick commerce a logical growth avenue. 

However, if asked whether we prefer quick commerce over the traditional marketplace in terms of channel development, the answer is nuanced. Yes, quick commerce, by nature, offers a limited product assortment. 

For a company like ours, with a significant presence in India, this presents a positive development. While I cannot definitively state that the like-for-like margin is superior, the product mix within this channel is notably favorable,” Unilever’s CEO said. 

He also pointed out Minimalist, the Indian beauty brand the FMCG giant recently acquired. Rather than focusing on mending the portfolio of Unilever in India, Fernandez is betting big on the beauty segment of the FMCG major. “The acquisition of Minimalist is an indication of what we will do in India to really move our portfolio forward faster,” he stated. 

A significant change that Unilever showcased is the social first marketing strategy. Fernandez pointed out the growing skepticism around brands. Hence, the newly appointed CEO is eyeing to create marketing activity systems “in which others can speak for” the brand at scale, and influencers are a significant part of this system. 

“There are tens of thousands of zip codes in India. I want one influencer in each one of those zip codes. In some, I want 100 but I want one influencer at least in each of the zip codes,” Fernandez declared.