“It is all about `pioneering the future’ with startups which are relevant for our business. HUL has a long heritage of `experimenting, planning & perfecting’ the capabilities which support the future of our business whilst startups typically launch and learn,“ said Sanjiv Mehta, chief executive and managing director of HUL that launched a global initiative, Unilever Foundry, in India on Friday.
So what can HUL, which controls nearly 15% of the country’s consumer products market, possibly gain from small startups? For one, ideas from startups can come handy across operations such as marketing, advertising and distribution, giving it an edge over rivals that still rely mostly on in-house experts for key business decisions. Experts say the move will also help HUL shift its rigid corporate mindset to imbibe the agility and mentality of startups in its business.
When organisations become too huge in scale and size, the spirit of innovation and entrepreneurial mindset tends to come down, said Raghu Viswanath, managing director of Vertebrand Management Consultants. “It therefore becomes critical to collaborate or acquire companies that can help such large organisations innovate and grow. Scarce talent is another reason why such partnerships become critical.“ Two years ago, HUL partnered a startup, Ozonetel, for Kan Khajura Tesan, a mobile-based radio channel to reach media-dark villages. It went on to garner 1.85 crore subscribers and become one of the fastest-growing media channels in India. HUL wants more such partnerships and has shortlisted ten young companies which will share their ideas and, if selected, work with the consumer goods major.
For startups, too, there is a lot at stake. HUL, which sells 30 billion pieces of finished products every year, is one of the largest advertisers in the country and has a direct reach to 3.2 million outlets. Therefore, even a small slice of its business would mean scale for a startup. Its parent company, British-Dutch Unilever, has a business that spans across 190 countries to reach two billion consumers every day, something that a young company can piggyback for its global reach.
HUL said the company has always been talking about becoming more agile and having a bias for action which are the defining traits of an entrepreneur, and that Unilever Foundry creates opportunities for its people to engage with pioneering entrepreneurs and imbibe this spirit.
“The biggest challenge for any startup is how do you take a great idea and convert it into a business proposition or have a proven technology and scale it up and that’s where Unilever Foundry comes into play,“ said Mehta. “We have great minds in marketing, customer development, technical and supply chain and versatile business leaders and what a startup often needs are a healthy challenge and assistance to prove their business concept or to scale up a proven idea and make it viable.“