Pandemic hinders Unilever's SEA ops, eCommerce sees 38% growth

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Unilever's Southeast Asia operations continued to be impacted by COVID-19 and according to CEO Alan Jope, was the main source of volume decline in the quarter. He explained that conditions in Southeast Asia continue to be challenging, with the quarter impacted by lockdown restrictions in the region. The company posted an underlying sales growth of 2.5% during the third quarter of 2021 (Q3 2021) with a 4.1% increase in price and a 1.5% dip in volume. Its turnover also increased 4.0%.

According to CFO and executive director Graeme Pitkethly, the lockdown in Vietnam for much of the quarter "several impacted" Unilever's business operations and its ability to meet consumer demand. However, the FMCG giant did leverage the easing of restrictions in Vietnam during the final days of the quarter to replenish stock levels. Meanwhile, Pitkethly said the company's overall competitiveness in Indonesia is not where it wants it to be and Unilever is working very hard to turn this around in the coming quarters.

That said, Unilever's eCommerce channel grew 38%, forming 12% of its sales and bringing the channel's year-to-date growth to 46%. B2C eCommerce, in particular, grew 23% during the quarter.

The popularity of eCommerce also exploded in Unilever's three priority markets - India, China and the US. ECommerce witnessed a growth of more than 200% in India, a 14% growth in China and an 11% growth in the US. At the same time, these three markets also delivered good growth for Unilever. As the number of COVID-19 cases dipped in India and restrictions eased, Unilever said the operating environment also improved and the country grew by double-digits.

In China, grew high single-digit led by volume with broad based growth across divisions. Although normalisation has continued, the market still remains below pre-COVID-19 levels overall, Unilever said. In the US, the company's food solutions, functional nutrition and prestige beauty businesses all contributed to growth, whilst in-home food and ice cream declined. On a macro level, North America and Europe markets declined against a high base in the prior year driven by demand for in-home food and hygiene products. On the other hand, markets are growing in Latin America, driven by price.

At the same time, Unilever's high-growth new businesses, prestige beauty and functional nutrition, each grew double-digit and Unilever also completed the acquisition of digitally-native skincare brand Paula's Choice. Underlying sales in functional nutrition grew double-digit in the third quarter with vitamins, minerals and supplements brand OLLY, growing strongly. Prestige beauty had a strong quarter growing double-digit with the return to stores continuing. During the quarter, Unilever also completed the operational separation of its tea business on 1 October and is focused on the next stage for this businses, which is expected to be either an IPO, sale or partnership.

The FMCG giant recently took home Best in Show - Brand at MARKETING-INTERACTIVE's Mob-Ex Awards, beating out stiff competition with four Gold, one Silver and four Bronze trophies. It also reappointed Mindshare last month to handle global media duties covering top markets including China and India, US and the UK, with the billings amounting to approximately US$3.3 billion globally, according to COMvergence.

The pitch comprised all integrated services and is Unilever's first global media review in six years. All markets held by Mindshare include Indonesia, Philippines, Thailand, Vietnam and Southeast Asia, China, India and South Asia, Netherlands and Belgium, Italy, Sweden and Nordics, Poland and Eastern Europe, UK and Ireland and the US. Amidst this flurry of activity also came David Porter's exit from Unilever as VP of global media. Currently based in Singapore, Porter is set to leave his post in early 2022.

Photo courtesy: 123RF

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