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Hindustan Unilever (HUL), the largest consumer goods firm in India, has introduced a new margin structure for its distributors, providing them with an opportunity to earn 70 basis points more margins with a higher return on investment. The new model, implemented three months ago, emphasizes a "pay for performance" principle, rewarding distributors for prioritizing the quality of service to stores, servicing larger networks, offering a wider range of products, and ensuring next-day delivery.

Hindustan Unilever (HUL), the largest consumer goods firm in India, has introduced a new margin structure for its distributors, providing them with an opportunity to earn 70 basis points more margins with a higher return on investment. The new model, implemented three months ago, emphasizes a "pay for performance" principle, rewarding distributors for prioritizing the quality of service to stores, servicing larger networks, offering a wider range of products, and ensuring next-day delivery.

HUL, the owner of well-known brands like Lux, Lifebuoy, Surf Excel, Rin, Pond's, and Dove, has made changes to its margins for distributors. The company has decreased the fixed margin by 60 basis points, while increasing the variable margins by 100 to 130 basis points. This decision has faced opposition from the All India Consumer Products Distributors Federation (AICPDF), who have expressed concerns about the timing of the move and the slow growth in sales volumes. They are even considering taking measures like stopping purchases in response to this change.

HUL, the owner of well-known brands like Lux, Lifebuoy, Surf Excel, Rin, Pond's, and Dove, has made changes to its margins for distributors. The company has decreased the fixed margin by 60 basis points, while increasing the variable margins by 100 to 130 basis points. This decision has faced opposition from the All India Consumer Products Distributors Federation (AICPDF), who have expressed concerns about the timing of the move and the slow growth in sales volumes. They are even considering taking measures like stopping purchases in response to this change.

Festive Demand: "Contrary to expectations, Diwali witnessed subdued enthusiasm for the FMCG sector. Post-Diwali sales have historically been low. Particularly hard-hit segments are chocolates, confectionery and biscuits, followed by beauty, and cosmetics," said Dhairyashil Patil, national president of All India Consumer Products Distributors Federation (AICPDF).