In Emerging Markets, Unilever Finds a Passport to Profit

Hari Sumarno runs a small shop selling tobacco and household sundries at the Palmerah market in Jakarta, the bustling capital of Indonesia, which has one of the world’s fastest-growing economies. Palmerah is a hive of more than 100 mom-and-pop stores, and shoppers haggle over everything from duck eggs to flip-flops as flies buzz overhead. The front of Sumarno’s cramped stall is plastered with small packages of Sunsilk shampoo, Fair & Lovely skin cream, Bango soy sauce, and Rexona deodorant. It’s a seemingly random assortment with one common denominator: All are Unilever brands.

Unilever, the world’s second-largest consumer-products company, provides Sumarno with discounted goods in exchange for prominent placement, and company sales reps check in weekly to make sure everything’s in stock and displayed neatly. Unilever brands account for about 30 percent of Sumarno’s 15 million rupiah ($1,500) in daily sales, and stores like his helped Unilever Indonesia boost sales 17 percent last year, nearly triple the growth rate of the nation’s gross domestic product. Competing products are “in the back,” says Sumarno, grinning as he jerks a thumb toward the dusty, unlit shelves behind him. “You can’t fight Unilever.”