WEF recognises our China manufacturing facility as a ‘Fourth Industrial Revolution Lighthouse’
Inside our markets: Unilever in China
A look at how we’re growing our business and brands in one of the world’s most dynamic countries.
How has Unilever China grown in recent years?
Our operations in China have delivered consistent and profitable growth in the past five years, becoming the third-biggest business in Unilever, with strong future-growth potential.
In our full-year 2021 results, Unilever China reported double-digit growth led by volume, with growth broad-based across our categories and retail channels, particularly in e-commerce. Our most recent quarterly results, for Q3 2022, showed single-digit growth, reflecting the effects of lockdowns in some parts of the country.
Between 2020 and 2021 our brands claimed winning share positions in the Hair Care, Skin Cleansing and Fabric Cleaning categories, both online and offline in China, with gains in Body Care sales online where most of the sales take place.
Our ice creams are among the leading players in China, with Cornetto being the top cone product in the market.
Our business-to-business foods division, Unilever Food Solutions (UFS), is thriving in China too, delivering strong growth between 2020 and 2021, with China becoming the largest business in UFS globally.
And our Foods retail channel doubled in size from 2019 to 2021.
Our products reach 80% of households across the country – and counting.
What is driving this strong growth?
Economic shifts in China mean consumers are increasingly upgrading to premium products and more sophisticated regimes, especially when it comes to beauty and personal care.
Our Vaseline brand has seen success from responding to this trend with the launch of its premium Pro Derma range, developed by Unilever scientists with nourishing ingredients to double the skin barrier’s strength from its first use. Pro Derma now accounts for 20% of Vaseline’s business in China, with the brand growing to €100 million in the market in 2021. .
Online shopping channels and e-commerce are also boosting our business and brands in China. In fact, if we split our traditional bricks-and-mortar retail channels into individual segments such as hypermarkets, supermarkets, grocery stores, specialist beauty outlets and so on, then e-commerce is our biggest single retail channel in the country.
How long has Unilever operated in China?
2023 will mark 100 years since Lever Brothers established the China Soap Co Ltd on the banks of the Huangpu River in Shanghai.
In 1986, Unilever returned to China after a hiatus, becoming one of the first multinational companies to enter the Chinese market.
In 1993, Wall’s China Co Ltd was established in Beijing and has since brought various ice creams to Chinese consumers.
Unilever China now employs more than 7,000 people, and our North Asia headquarters and cutting-edge global R&D centre are based in Shanghai.
We have eight production facilities nationwide, including two which are recognised by the World Economic Forum as Lighthouse factories – beacons of tech-driven efficiency, innovation and empowerment. .
Which are some of Unilever China’s most popular brands?
Dove and Vaseline are both very popular in China. Vaseline is the market leader in the Body Care category with the No.1 Brand Awareness score.
Clear – the biggest hair brand in the portfolio and a market leader in the male shampoo segment – has continued to gain share for the last three years.
Our OMO laundry brand is Unilever China’s biggest seller, and Comfort is the market leader in Fabric Enhancement.
Knorr (Professional) is also a big brand in China. It rates as the No.1 ‘top-of-mind’ awareness brand among chefs in out-of-home ranges and in categories such as Ready-To-Use sauces among consumers at home. The brand is known for its innovative products and meal solutions that enable people to create great-tasting dishes with ease.
Cornetto ice cream is a hit with Generation Z consumers. Its name in China is Ke’ai Duo which translates as ‘lots of loveliness’.
And Zhonghua toothpaste is a local favourite. Exclusively available in the country, its name translates as ‘China’.
How are our brands bringing their purpose to life in China?
Brands across all our business groups are putting their purpose into practice.
In Home Care, for example, OMO has partnered with NGO Green River to launch a campaign to protect the ecological system around the Three-River-Source region – the origin points of the Yangtze, Yellow and Lancang Rivers. The work will safeguard 1 million square metres of land, and the campaign also promotes plastic reduction in line with OMO’s Clean Future commitments.
Meanwhile, in Ice Cream, our Wall’s brand is delivering on its pledge to bring happiness to communities by opening a Happiness Centre in a rural area of Lhasa in Tibet. As part of the brand’s Human Happiness Movement in partnership with the China Environmental Protection Foundation, the centre provides a space for local people to gather and enjoy spending time together – whether it’s through activities for children, a quiet place to read or an opportunity to watch a film with friends. .
Lux launched its ‘Go Green, Go Lux’ sustainability programme in 2011. In the past 12 years, this project has been devoted to beautifying the Tibetan plateau, working with the brand’s partners, by planting more than 12 million square metres with grasses. It’s a move that has helped to absorb 6,600+ tonnes of CO2 and supported 26,000+ farmers in improving their livelihoods.
Unilever Food Solutions has defined its purpose as freeing people to love what they do, through support, inspiration and progress. It has been helping partners in the hospitality sector to respond to the crushing business impacts of Covid-19 with confidence, providing them with epidemic prevention supplies and quick solutions during an immensely challenging time.
What makes this market completely unique in the world?
Christmas shopping sprees and Black Friday sales don’t come close to the volume of products sold online in China on Singles Day, also known as D-11, on 11 November.
This shopping extravaganza started back in 2009 as a 24-hour flash sale, where online retailers such as Alibaba and JD invited consumers to treat themselves, as an antithesis to Valentine’s Day, when consumers buy gifts for others. It’s since become the world’s biggest shopping event, racking up around $139 billion of sales across the two retailers’ platforms last year.
It’s big news for Unilever, too. In 2022, we strengthened our partnerships with China’s top key opinion leaders and achieved very strong sales, particularly from live-streaming and emerging new e-commerce platforms such as TikTok. Our membership programme also reached milestones; during the peak shopping festival, we recruited more than 2 million new members, representing a 35% increase year on year. All categories delivered positive incremental growth, demonstrating our strong competitiveness in the market.
Our Hefei site in China has become our second facility in nine months – alongside the Dubai Personal Care factory – to join the World Economic Forum’s network of Lighthouse factories, shaping the future of manufacturing through digital technologies.
Our financial results for the first half of this year – which delivered consistency in challenging conditions – show how we’re continuing to realise the benefits of the strategic choices we’ve made in the Unilever Compass.