Unilever seizes opportunity in SEA’s burgeoning middle class

The company grows personal care products based on consumer trends, unique strategies, and the evolving regional market.

Southeast Asia’s growing middle class is presenting an opportunity for Unilever’s personal care division to capitalise on emerging consumer habits. This assertion by Kartik Chandrasekhar, a senior executive at Unilever, seems to carry over Southeast Asia amidst diversity within the region as Indonesia, Vietnam, the Philippines, Thailand, and other countries all present distinct markets.

Speaking with Retail Asia, Chandrasekhar picked a few overarching trends that prevail throughout the region, namely the tendency towards premiumisation, the demand for omnichannel experiences, and a focus on value as inflation persists.

“It’s nearly half a billion people living here in this exciting region. And, 50% of that population is an emerging middle class that’s progressing very fast, with more purchasing power,” he said. This emerging middle class, about 250 million of the population of Southeast Asia, is shifting towards products offering enhanced benefits.

For instance, Unilever has found that consumers are moving from traditional bar soaps to body washes — a trend identified as premiumisation.

Secondly, Southeast Asian consumers crave an omnichannel experience, desiring product knowledge from various sources — friends, influencers, TV ads, social media, and in-store experiences.

“Today, consumers across these markets don’t just want to go into a supermarket or a mom-and-pop store or a bathroom in Indonesia, and buy a product. They would like to know about the product from friends from influencers online,” Chandrasekhar said.

This key trend emphasises the importance of engaging consumers through various touchpoints, including digital platforms, social media, and influencers, to provide a comprehensive experience and build brand awareness, he explained.

Also, Unilever is looking to leverage this by offering additional services such as telehealth consultations via QR codes on Lifebuoy and Pepsodent packaging.

In the face of rising inflation, the company is also working to offer smart shoppers the value they seek, from bigger packs for the emerging middle class to smaller, affordable packs for more price-sensitive consumers.

Chandrasekhar anticipates these trends continuing well into 2024 and beyond, driving Unilever’s strategic approach. This includes a focus on purpose marketing, catering to each distinct market within Southeast Asia, and delivering initiatives at scale.

The company aims to bring purposeful brands to life, ensuring consumers understand the brand’s mission. Using the example of Pepsodent, Chandrasekhar noted that consumers are not just buying toothpaste, but investing in their family's oral health.

This realisation leads to increased brand loyalty and further sales, forming what Chandrasekhar terms the “golden cycle of purpose marketing and purpose business.”

One of Unilever’s key strategies is disaggregation, acknowledging that each Southeast Asian country represents a unique market with different consumer behaviours and preferences.

The company also strives to implement its initiatives at scale, capitalizing on its extensive reach in households across the region. By delivering beneficial outcomes to consumers via everyday products, Unilever believes it can create a “positive outcome for society” and subsequently stimulate business growth.

During the interview, Chandrasekhar also touched on the challenges ahead, emphasizing the need to cater to rural populations who do not have easy access to products and services.

He noted the significant disparity between rural and urban areas in terms of access to health professionals and suggested that corporations, in collaboration with governments, can help narrow this gap.

In terms of future plans, Chandrasekhar revealed that Unilever prides itself on its partnerships with emerging Southeast Asian startups.

He highlighted the firm’s cooperation with Halo doc for telehealth consultations and PGI, the Indonesian National Dentist Association. These partnerships align with Unilever’s broader strategy to enhance the value of its products and deliver beneficial services to consumers.

As a parting shot, Chandrasekhar stressed: “When consumers see your purpose, they’re able to buy more. You are not just buying into a great-tasting toothpaste, but also buying into the protection of your family’s oral health.”