Unilever records 49% YoY growth in e-commerce, set to invest ‘heavily’ in marketing
Unilever financial results for the first half of 2020 have recorded a 49% year-on-year growth in e-commerce sales. The world’s leading largest advertiser has shifted much of its marketing spend to the products it can actually shift, such as its hygiene business, anticipating to gradually increase spend as the Covid-19 pandemic lockdown eases in regions around the world.
According to the chief executive Alan Jope, the consumer goods giant delivered a better-than-expected decline, adding the results “demonstrated the resilience of the business”.
Unilever’s results in the first half of the year show that its pretax profit was up 6%, while its turnover decreased from €26.126bn in 2019 H1 to €25.714bn. The company’s operating profit rose from €4.589bn to €4.672bn, whereas beauty and personal care, home care, and foods and refreshment categories were all down from a combined €13.710bn to €13.292bn. Its free cash flow was up €1.3bn to €2.9bn.
Considering the circumstances, Unilever’s performed well and is prepping for the ease of lockdown where consumer behaviour will shift once more.
On how Covid-19 has impacted the business, Unilever said there were “significant changes in the operating environment in our markets”.
“Consumer behaviour changed, time spent at home was drastically up, and so we championed hygiene products to curtail the spread of Covid-19. Our China sales were hit first in January and reopened in some way around April. In most other major markets, March was the first month of significant Covid-19 impact,” the consumer said.
Meanwhile, hygiene products grew, understandably in double digits and Unilever’s Lifebuoy hygiene brand was pushed into more than new 50 markets. Meanwhile, Unilever increased its hand sanitiser capacity by around 600 times across several brands.
On the new development, Jope said: “We had a very small hand sanitiser business with only two manufacturing sites. Now we are larger than that of the market leader, last year in the whole of 2019”, adding, “much of our spend has been going into growing these brands, in anticipation of long-term demand”.
On how Covid-19 has impacted Unilever’s marketing plans, Jope said: “As consumer habits and quarantine rules fluctuated, Unilever had to rely on dynamic marketing. Spend was temporarily reduced in some channels and geographies with investment moving to growth opportunities.”
“We plan to invest heavily as lockdowns ease and consumers learn to live with Covid-19. We expect significant investment to support brand campaigns and product innovations tailored to this environment,” he added.
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