In Good Company: Unilever's white spaces windfall helps pandemic relief as well

Agile approach to products and marketing has not only led to new markets but has proved a blessing in crisis situations like pandemics and disasters

Unilever International's Umesh Shah says that in the New Age, everything can be done in a very agile way, whether it is marketing, sales or talent management or even all the other activities. In the new era, he says, "resources are no longer a constr

It is not often that you find a significant business innovation originating in your home town and when you do, it merits celebration. When it is the world's second-biggest fast-moving consumer goods company doing it, there is a special exhilaration.

Singapore-based Unilever International (UI), with its quest to fill the "white spaces" left uncovered by Anglo-Dutch parent Unilever, may have just pulled that off.

In the eight years since the unit germinated in the mind of Umesh Shah, its global business head, the business has been expanding swiftly year after year. Unilever does not reveal figures separately for UI, but turnover is believed to be in the range of between $1.5 billion and $2 billion.

To understand what filling white spaces means in a marketing context, picture this: Career coaches often bring out a jar and coloured balls and ask you to name your important goals and secondary goals. The key goals are the balls which you place in the jar first. But there's space between the balls and here you can put shale and sand, your secondary goals - in Unilever's case, that would be Bru coffee that isn't mainstream in Singapore but popular in eateries of a certain cuisine and class, halal food in some markets, or a hallowed brand like Pears soap that millions may yet relate to but is no longer mainstream.

In other words, UI seeks to fill the spaces that Unilever Corporate, owner of a dozen brands that each turns over more than a billion euros a year, is too big, and too busy to focus on. With the parent company owning hundreds of brands, some that have been around more than 200 years, Mr Shah's outfit has plenty of pebbles to play with.

"We said, 'Guys, we have 400 brands, we have fantastic heritage, we have high-quality stuff. Why can't we create two different go-to-market systems?'" says Mr Shah. "The big one we call mothership. It is our standard operating company in large countries. And then we have Unilever International which (runs all) the speedboats to the mothership."

As he explains, the organisational mothership will understandably prioritise the very core of the business. The speedboat, on the other hand, will look at all the brands that are available, take those and launch fast with, say, brands like Lady's Choice mayonnaise or Cream Silk hair conditioner in Singapore that the thousands of Filipino helpers here relate to - products that their "ma'ams" may not be aware of.

Now, consider that the number of overseas Filipino workers alone was estimated at 12 million last year. Worldwide, Mr Shah reckons, there are about 300 million people white-space seeking their home products.

"We call it more of the more, rather than core of the core," he says.

Whereas the mothership is growing at about 2 per cent annually, his own unit is clocking close to 15 per cent growth.

Agile systems are quite the in-thing in technology these days.

For instance, Pivotal Software, a pioneer in agile software, officially became a subsidiary of infrastructure software firm VMware following a US$2.7 billion (S$3.8 billion) acquisition that closed on Dec 30 last year.

Both companies are owned by Dell Technologies.

  • Fast facts

  • THE CEO

    Mr Umesh Shah is executive vice-president and global business head of Unilever International, a global business unit of the parent company that he conceptualised and started in 2012.

    A naturalised Singaporean, Mr Shah, 58, started his career in India. His three decades with Unilever include stints in finance, commercial, supply chain, procurement, treasury and general management.

    Mr Shah has a degree in chemical engineering from Ahmedabad and a Master in Management Studies, Finance from Narsee Monjee Institute of Management Studies, Mumbai.

    He and his wife Dipti are parents of two boys, the younger of whom is poised to enter national service.

  • THE COMPANY

    Unilever International, based in Singapore, is a business unit of Unilever. It functions as an alternative but complementary route to market. It services white space opportunities and is a significant global business unit operating from nine key hubs (Singapore, the United States, the United Kingdom, South Korea, India, Dubai, France, the Philippines and Australia), with a diverse range of products, using third-party distributors and consolidators to reach consumers in over 150 markets.

    Parent Unilever is a British-Dutch multinational co-headquartered in London and Rotterdam. Its key product lines are food and refreshments, home care and beauty and personal care. Its brands include Lipton, Horlicks, Boost, Surf, Dove, Lux and Vaseline. Unilever's products are used by an estimated 2.5 billion people every day and it reported €52 billion (S$80.4 billion) in turnover last year.

    The company does not provide specific figures for Unilever International but it is believed to have exceeded turnover of $1.5 billion last year.

But traditional multinational corporations like Unilever tend to have rigid corporate structures and it is no secret that even the most nimble cannot avoid a certain bureaucracy as they grow bigger.

That UI was seeded as an entrepreneurial venture within such a structure goes to the credit of then chief operating officer Harish Manwani, who signed off on the project, and CEO Paul Polman, who lent his backing.

Last year, it was presented the Compass Award, the highest internal recognition accorded a unit within the Unilever family.

The ability to have agile responses to situations came in handy during the effort to control the raging coronavirus pandemic, for which parent Unilever has pledged to contribute €100 million (S$155 million) through donations of soap, sanitiser, bleach and food.

Responding to a recent situation in Singapore, UI itself chartered an Emirates 777 freighter to ferry sanitiser from a factory outside New Delhi.

"We chartered the full plane because it would have taken four weeks to bring the supplies down by sea," says Mr Shah. "Instead, we were happy to do it in five hours. My CEO said profit is the least of our concerns in times like these. Similarly, our unique capabilities to arrange supplies from anywhere in the world came in handy when Typhoon Haiyan hit the Philippines a few years ago."

With some 2.5 billion people using a Unilever product in an average day, the company is a fount of consumer insight, and ways to reach them.

Mr Shah says with more and more people online, the mass advertising is increasingly effected through social media platforms such as Facebook, Twitter and Google. Another route is using key influencers - sometimes as young as 12 years of age - and suddenly, you see a market of 20,000 or more taking shape.

"In the New Age, everything can be done in a very agile way, whether it's marketing, sales or talent management or even all the other activities," he says. "What you used to do in-house can all be done outside. In some cases, there are companies that can tell you things you could do with your brand that you had not thought of yourself. In the new era, resources are no longer a constraint for growth."

On the product side, there is a clamour from the consumers for new things coming at them every six months or even three. If you cannot meet that thirst, you lose the market.

Another trend is the shift towards "naturals". People say they don't want parabens - a class of preservatives - in cosmetics.

Sometimes, there is resistance to artificial colours and perfumes in products.

It's reaching a point where some consumers are more aware of what is NOT in a product than what is in it and that is why Unilever has acquired heritage brands such as Shea Moisture, which is a very "natural" kind of brand.

Yet another trend, especially in personal beauty, is the craze for Japanese and "Made in Korea" products. Two years ago, Unilever paid €2.27 billion to acquire Carver Korea, maker of AHC facial masks and other skincare products.

"People are buying these face masks in the billions and we are selling it in Singapore, Thailand, Malaysia... There's a sense that anything from Korea or Japan (must be good) because they are far ahead in terms of beauty products," Mr Shah says.

Likewise, in food products as well, the craze for the unfamiliar is catching on. People yearn to experiment and try new cuisines such as Lebanese or Thai food. Indians want to try non-Indian.

If you can offer such customers something unique, you have a pathway to profit.

His big growth area, says Mr Shah, is Africa, where the aspiration to use Western products is accelerating, just as South Asia witnessed the phenomenon a quarter century ago. For core Unilever brands such as the healing product Vaseline, Africa, with its extreme weather, is a big opportunity and the market is responding well.

Dove soap, perhaps one of the biggest in the stable, still has untapped markets around the world. Meanwhile, thanks to UI, Pears, first produced and sold in 1807 from a shop on London's Oxford Street, is once again among the top five soap brands in Britain after yielding shelf space to more contemporary offerings.

"We are in the business of smalls," says Mr Shah. "Once an area becomes big, the operating company will do it."

The son of a government tax officer, the trim Mr Shah counts swimming and travel for leisure as his key pastimes. He also says he is fascinated by every kind of market and how they work, a throwback perhaps to his days in Unilever's treasury operations.

"Nowadays, it's becoming so complex," he says. "There are of course movements that come from issues of liquidity. Then there are the smart algorithms. Every market now - forex to commodities - is moving. Whenever I find time, I just look at how this whole thing works."

Join ST's WhatsApp Channel and get the latest news and must-reads.

A version of this article appeared in the print edition of The Sunday Times on April 12, 2020, with the headline In Good Company: Unilever's white spaces windfall helps pandemic relief as well . Subscribe