India’s largest FMCG company is seeking some life-saving help from start-ups

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India’s largest FMCG company is seeking some life-saving help from start-upsHindustan Unilever has realized that disruptive technologies have been challenging businesses. It has now found a solution to this and is going to partner technology-focused startups as a business imperative to reinvent itself.
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The maker of Dove soap, Sunsilk shampoo and Lipton tea wants to remain relevant in the market which is getting influenced by disruptive technologies . Therefore, it has short-listed ten startups that can get access to a part of its business, mentors and other resources.

The India's largest consumer goods maker can gain from new technologies that will help the company in engaging consumers, shoppers or the way it distributes products.

Commenting about the company’s new move, its chief executive and managing director, Sanjiv Mehta said it is all about 'pioneering the future' with startups which are relevant for the 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," he said.

On Friday, HUL has launched a global initiative, Unilever Foundry, in India.

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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 are of the view that the move would also help HUL shift its rigid corporate mindset to imbibe the agility and mentality of startups in its business.

When organizations 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. The company wants more such partnerships and has shortlisted ten young companies which will share their ideas and, if selected, work with the consumer goods major.

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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.

Moreover, its parent company British-Dutch Unilever’s business 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.

(Image: Indiatimes)