How HUL Strengthened its grip over the Consumer Goods Market
The HUL, GSK Merger
Hindustan Unilever Limited, India’s leading FMCG player has completed the merger with Glaxo Smith Klein Consumer Healthcare Limited after winning a hard-fought race against Nestle, ITC and Coca-Cola.
HUL has been one of the most successful FMCG firms in India with its market capitalization growing by a CAGR of over 12% in its 20 years of operation. The FMCG and personal care industry in India is a highly competitive one given the diverse range of products it includes. The top 10 firms in this sector have only 35% of the total market share. In such a competitive industry, gaining even the smallest bit of market share can be crucial. HUL has done just that by merging GSK with itself.
“Both organizations have common values coming from a lineage of respected parent companies and a shared heritage of building iconic trusted brands”
- HUL Chairman and Managing Director Sanjiv Mehta
With the merger with GSK, HUL has gained a footing in segments it had no market share in. With an entry into the consumer healthcare segment through Crocin and health drink segment through Horlicks, HUL has is starting to take control of the entire consumer goods space in the country. They already have a majority market share in the soap and detergent segments. They have the beverage space entirely covered now with Bru, Brooke Bond, Lipton, Horlicks, and Boost. Sensodyne comes in from GSK as a supplement to HUL’s very own Pepsodent and Close Up hence strengthening their footing in the toothpaste segment.
HUL is also set to acquire VWash brand from Glenmark Pharmaceuticals Ltd. This coupled with the healthcare products from GSK will give HUL access to key Pharmacy channels. This will help HUL penetrate further into the market through Chemists and will also facilitate trade.
The few to no job cuts and the performance of HUL’s stock in the crisis speak volumes of the financial stability of the organization. A monopoly might be a shot in the dark because of stern competition from ITC, Nestle, Dabur, Colgate, Marico, and Britannia but HUL is not far away from completely dominating the Consumer Goods space.
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