Brand business Unilever says that 14% of its sales were online in the first half of its financial year, following the shift to ecommerce that has taken place over the course of the Covid-19 pandemic.
That represents fast growth as Unilever has seen the proportion of sales that take place online more than double over the last three years. In 2019, ecommerce represented 6% of turnover, but the business said it would prioritise ecommerce and digitisation following 61% online sales growth in 2020. In 2021, its ecommerce sales grew by 44%.
Unilever is currently reorganising around a new simpler model featuring five business groups and its Unilever Business Operations technology backbone. The new model is expected to mean savings of about €600m over two years.
Prices continued to rise over the first half in response to inflation.
The update comes as Unilever today reports turnover of €29.6bn in the first half of 2022, to the end of June. That’s 14.9% ahead of the same time last year. Some 14% of its sales were online. Its prestige beauty and health and wellbeing business – which includes brands such as Dermalogica, REN and Tatcha that sell direct to customers online as well as through wholesale relationships – saw double digit sales growth and accounted for 4% of group turnover. Pre-tax profits of €4.4bn were down by 0.2% on the previous year.
Alan Jope, chief executive of Unilever, says: “Unilever has delivered a first half performance which builds on our momentum of 2021, despite the challenges of high inflation and slower global growth. Underlying sales growth of 8.1% was driven by strong pricing to mitigate cost inflations which, as expected, had some impact on volume. We are now raising our sales guidance for the year.”
He says the business has made progress against its strategic priorities. “We are maintaining strong investment in our brands, supporting 9.4% underlying sales growth in our billion+ Euro brands. Ecommerce sales now represent 14% of turnover, up from 6% in 2019. Of our three priority markets, the USA and India again grew strongly, while sales in China were affected by the lockdowns in the second quarter.”