The giant FMCG Company Hindustan Unilever needs no introduction in today’s world.
With its essential and daily use products, Hindustan Unilever through its different brands has now become a part of our family !
Right from starting our day till going to bed, we almost use multiple products of this giant brand.
But just like almost all other industries,does Covid-19 really affect HUL (Hindustan Unilever Limited)?
As we are looking through the news everyday, we only read about how the consumer goods (FMCG) industry is fledgling in these situations. But is this true? Are FMCG really fledgling in these situations?
While reading through certain articles, it was concluded that it is actually not true. Hindustan Unilever (HUL), which is the one of the biggest companies for FMCG products had claimed that they are actually not earning as much profit as they were expecting. The real situation is that there are many additional operation expenses that the company is bearing. These expenses are much more than the expectation and eating a lot of their profits. So actually the situation had turned out to be not so profitable for these companies too.
The company is finding some difficulties in the transportation of the raw material and finished products. As there is a restriction in the movement of goods from one state to another. And because of that the company is not able to provide their products to their regular customers.
The company is also facing problems of new competition in the market. As the FMCG is the only industry that is operating right now at a normal pace. Many new firms are shifting their production to the FMCG unit. Which leads to new competitors in the market. And taking much of their market share.
But it was also cleared by HUL that the demand had increased to certain extent even though profit had decreased. The company is now producing at 90% capacity while it’s normal capacity was 75%. HUL has a strong financial position, even stronger cash flow so it is believed that they won’t have any difficulty in meeting the demands of the consumers in the near end. It won’t give up that easily without giving a fight.
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HUL is ready to fight against Covid-19. It had started analysing their line of action, even started to study new technology to develop a mode of distribution which include zero contact, also planned to start online Kirana stores and had cut down the production of cosmetics and used that to produce personal hygiene products. But still the future is unstable and they do not know where they will stand in the coming period.
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