**OT** Hind-Lever ready to connect - Keki DadiSeth
Foray into Internet
Our Bureau
MUMBAI, Feb. 23
CLOSE on the heels of parent Unilever making its biggest investment in e-commerce through a 50:50 joint venture with iVillage, the Rs. 10,918-crore ($2.4 billion) Hindustan Lever Ltd (HLL) (http://www.hll.com/) today unveiled Internet plans of a magnitude that is claimed to be limited by the country's currently available infrastructure.
HLL wants to be India's largest e-tailer. According to Mr. K.B. Dadiseth, Chairman, it is as yet undecided if the initiative should be through HLL or a separate outfit. "We have not ruled out any option,' he said at an analysts' meet.
While an investment figure for the project was not given, Mr. D. Sundaram, Finance Director, told newspersons that he "wouldn't be surprised if the company spent Rs. 80-100 crores over the next three years." The said period assigned for the project's B2B first phase could shrink.
HLL's Internet plan is basically an amalgam of making its distribution and supply channels Net-based and, thereby, value-added, along with leveraging that platform to push non-HLL products. The cited opportunities lay in business to business (B2B), consumer connectivity and consumer commerce.
"We will connect on a scale never attempted before in India across all our 7,000-odd stockists fundamental to HLL's distribution infrastructure, across a bulk of the retail trade, across all our suppliers and across the length and breadth of the country. We will attract and build stickiness with over 500 million of our consumers and we will put into place a robust and reliable physical fulfilment machine that will make HLL the largest full line e-tailer in the country," Mr. Sundaram said.
While the enabling factors for this are technology, consumer insight and physical fulfilment, HLL which perceives itself capable of the latter two will "partner and source" technology from the best players. Citing the shift from broad and company-centred Web sites to community centred ones (as iVillage is), Mr. Sundaram said women, youth, affluent high-end consumers and rural consumers are HLL's focus groups. Partnerships will most likely revolve around such Web sites.
Currently, HLL reaches its products through 90-odd C&FAs, 7,000 stockists and over a million retailers. HLL's supply chain, already Net-enabled to an extent, will further benefit from this initiative. ``We won't order materials any more, the supplier will manage our inventory,' Mr. Sundaram said.
The bulk of HLL's business will be covered by the Net-based systems in 36 months' time. The e-tailing plan, with dedicated teams working on it, has been on for the last 18 months, Mr. Dadiseth said.
According to him, the real potential of HLL's e-tailing foray emerges when in addition to the Rs. 1,400 crores of HLL inventory currently blocked at stockists and retailers, the additional bulk of Rs. 3,000-4,000 crores of similarly stuck non-HLL inventory is also factored in. Thus, business worth Rs. 5,000-6,000 crores is waiting to be realised. HLL can buy on B2B basis, bring it to any of its 7,000 stockists and fulfil the transaction.
"I become then a supplier of choice," Mr. Dadiseth said of the benefit accruing to HLL, adding it makes HLL that much more of a "delight" for the customer to interact with.
Mr. Sundaram said that the plan was of a scale that may need India to catch up in terms of enabling infrastructure. "We are not going to wait for it, we will even facilitate it," he said. The Net-based e-tailing will work on a combination of HLL's own V-Sat network, that of others, mobile telephony and the public network.
By end-March, the company is expected to "see agreement on 6-8 growth engines," mainly product lines, that would drive future growth. `Project Millennium', of which this is a part, seeks to answer questions on sustaining future growth, attracting and retaining the best talent, learning to seek, gain and share knowledge and strengthening cost leadership against not just local but international benchmarks.
-Business Line |
