Covid-19 Second Wave A ‘Speed Breaker’ For India’s Growth, Says HUL’s Sanjiv Mehta

The second wave of Covid-19 pandemic may have ravaged India’s hinterland but the nation’s largest consumer goods maker sees it only as a “speed breaker” in the country’s growth trajectory.

It will take a few weeks to estimate the impact of the second wave in rural India, but the hinterland would remain more resilient, Sanjiv Mehta, chairman and managing director of Hindustan Unilever Ltd., said at the company’s annual general meeting on June 22.

The comments come at a time when distributors of such goods across the country told BloombergQuint that demand from rural India has dropped amid the more contagious second wave.

That’s also corroborated by Bizom’s data of the near 25% drop in the number of active ‘kiranas’, or mom-and-pop stores, in May, resulting in a month-on-month decline in sales of soaps to shampoos and biscuits. However, indicators from the first two weeks of June point to a 25% increase in the number of active ‘kirana’ outlets as restrictions ease and operational hours increase.

HUL said its business-to-business app, Shikhar, now covers 500,000 stores, which helped the company receive orders even when its salesmen couldn’t reach outlets during the lockdown. “We were able to optimise deliveries by using location data to triangulate best possible routes to reach them by avoiding containment zones and other restrictions,” Mehta said.

The company changed the name of its personal care brand Fair & Lovely to Glow & Lovely and the new brand name has been received well, Mehta said. However, sales of the brand were impacted due to Covid-19.

In the personal care segment, Bizom said, distributors and companies dumped goods 88% higher than the average of the last week of May to aid a quick recovery.

Mehta also said the profitability of Lakme Lever has been impacted due to Covid-19 and the lack of mobility. He said the brand has huge potential and is the market leader in cosmetics in the country.