Everyone grab their last croissant coffee, take seats. As expected, it's the Unilever crowd that are being unruly. So welcome back to day 2. I hope everybody had a good evening last night. I have heard no war stories at all from last night.
I must admit to being a little bit disappointed, but I'll put it down to cold weather and jet lag. So I haven't got a lot to say. I just want to talk through quickly the agenda for today. We'll start off with the geographies. So we have Amanda coming to talk about North America with Ajay on ecom.
And then Rohit, and Yongfang and Yifeng will be here to talk about China and also e comm. So we've deliberately put those together so you can contrast the 2. And then we move into rotations. Now just to say the reason we do rotations is 1, to say get out of the seats and it's a bit more interesting. But also in smaller groups, it's easier to be interactive.
So please make those sessions interactive. And I'll give more detailed instructions of who goes where when after the break. And then so that's this morning, we have the first one and then the second two after lunch. And then we'll finish off with we've allowed an hour, I don't know if it needs an hour, for Q and A with the whole of the exec. And Alan then will do a short summary at the end.
We will have you away by 4 I promise that, maybe slightly earlier depending on the Q and A. Enjoy the day. And with that, I will now pass on to Amanda.
Good morning, everyone. It's really good to have you here. I know I am obligated to make sure that you see the Safe Harbor statement. But although you have been here for about 24 hours now, and I've had the chance to talk with many of you, I nonetheless wanted to give you a very big welcome to Englewood Cliffs. North America is Unilever's biggest performance management unit and a very much a business that has a lot to be proud of, especially to be proud of the people that we have here and to be proud of being an employer of choice.
And we've listed here just a few of the many external recognitions that we've had for that. And I think they're testament to the fact that we truly are a diverse and inclusive environment. In terms of gender balance, we're at 52% women, 48% men. People genuinely love working for Unilever. We have a net promoter score in the U.
S. Business of 94% of employees recommending our brands and products to our consumers, which is exceptionally high. We are also a business that is truly recognized as a valued and valuable supplier to our customers. And that is something that we work on every single day to help them be better and to help grow our business as well. Now I have been here for almost 2 years.
The last time that I talked with many of you was when I was leading our foods category. And I have to say that it is a real privilege to have the opportunity to lead this amazing team. Many of them are here today, and I hope that you've had the opportunity to speak with them. Again, it's a diverse team. There is more North American talent on this team than there has been for quite some time.
You can probably tell that I am still working on my New Jersey accent. I haven't quite got it yet. But a team that also has a good mix of people who've joined us as mid career recruits from other CPG players in North America and also a number of us who've had global experiences within Unilever, which we're able to draw on as well. So as a backdrop to what we're going to be talking about this morning, I thought it might be helpful just to talk for a few moments on how America is changing. And this might not be new news to any of you who actually live in the U.
S, but I think we can say perhaps more than how is America changing, how has America changed. And this is the landscape that we are playing against. So this is a polycultural market. Actually, 40% of the population is multicultural. 1 in 2 babies that are born in America today are multicultural.
It is a market that is more polarized when it comes to income and income inequality than it has ever been. And also a market that's quite different from some other developed ones insofar as not only do we have an aging population so that as you saw yesterday, 1 in 5 of the population will be over 60, but also has a gen zennial population that will be the largest cohort in history in this country too. I am not going to get into politics, but I think it's safe to say that it is a country hugely divided when it comes to politics and maybe that is a symptom of the kind of divisions that I've just touched on. There's a fundamental lack of trust. Trust in government in particular is at an all time low.
Interestingly, trust in business and people's trust in my business, in their words, is at an all time high. And I think that says something about the responsibility that we have as businesses to have an impact in society that people are holding us to account for that. And that's very much in line obviously with what we as Unilever stand for. We're in an age of transparency. You know that.
We're also in an age where people are seeking out wellness and increasingly that wellness is less to do with physical wellness and much more to do with mental well-being and the need for things like sleep. Increasing environmentalism, I think all but the most hardened climate change skeptics would have to agree on the extent to which climate is wreaking havoc on this country and you only need to look at what's going on at the moment in California to see that. And then there's the rise of technology in every aspect of our lives and our work, social media that is driving some of those divisions in society. And then when we look at what is really a fast changing retail landscape, I think we can sum it up by just saying it is an omnichannel world and we'll get into that in a bit more detail. But truly where consumers expect to be able to buy it when they want it, how they want it, and where and when they want it as well.
So let me switch to giving you a snapshot of our North American business. It is a $10,000,000,000 business in terms of its overall turnover. 10% of the business is in Canada with a team that reports into me there. So broadly in line with the percentage of population, you could look at it on that basis. There is then 10%, it's a $1,000,000,000 of this business that is made up of what we call our GBUs, the global business units, which are the Prestige business, the Unilever Food Solutions business that is based out of here, the Dollar Shave Club Business, TG and the Small T2 business that we have here.
And you can see what we represent here in the U. S. As far as the percentage of Unilever's turnover profit and cash. We have about 8,000 people who work for us here in North America, 14 factories, 11 distribution centers. And if I then switch to talk about our customer footprint, we're an incredibly well balanced business and well positioned business.
I think you could argue when you look at how we are represented across classes of trade, a strong mass and club business at 40%, 30% in grocery, 10% in health and beauty. Just remember when you look at that number that this is for our total business including the foods and refreshment business. So we're far more at fair share when you look at it just as far as the BPC business is concerned. Hanneke talked about out of home and the enormous opportunity that we have there for the food and refreshment business, discounted business being a 5% and broadly in line with the market. And then we will be talking more about e commerce where we're growing very fast.
It's 5% of our total turnover. It's slightly under share of market. We're closing that gap very fast. That's a super exciting area of our business. Having talked about customer footprint, let me come on and talk about our division footprint.
60% of our turnover is in beauty and personal care split across our retail business and the prestige businesses that I talked about earlier. We've got £4,000,000,000 in Food and Refreshment, including the Unilever Food Solutions business. And then we've got a £200,000,000 business in home care, great business that is essentially the 7th generation business that Peter touched on yesterday. A huge amount of our focus over a number of years has been ensuring that we have a future fit portfolio here in North America. This is a slightly different timeline from the one that you saw from Alan and Graeme yesterday.
But I think it's an important one to reflect on just the amount of change that we have been making to ensure that we're well positioned for growth in categories attractive not only as far as the top line momentum is concerned, but also in terms of the profitability of those categories as well. If you look at it at this whole time period, then this represents €2,400,000,000 turnover equivalent that we have switched out of our portfolio with €2,700,000,000 of turnover that we have acquired into the portfolio. And you can see the most recent of those acquisitions being the OLLI Nutrition and Supplements business and the Tatcha business by our Prestige team. And that has led us to have a very successful reshape of our portfolio, going from only half of our business at the beginning of this period being in Beauty and Personal Care to getting to, let's call it 60% of the business now being in Beauty and Personal Care and 39% of it being in Food and Refreshment. And clearly that beauty and personal care switch has positioned us better for the future with that if you look at at least on a 3 year CAGR, it's a little bit different when you look at 2019 numbers, and I'm sure you see that in the data sets that you're looking at as well.
But if you look at it at a 3 year basis, then I think what you can see is that that VPC portfolio has had about 200 bps of momentum more than the Foods and Refreshment has. And that reshape has also led us, I believe, to be really strongly positioned. When you look at where we have market leadership from a category perspective, you can see our key categories up here and just look at the relative market shares that we have in those categories with skin cleansing being the strongest with a 3.0 relative market share to the nearest competitor. And not market share to the nearest competitor. And not only do we have category leading positions, but in almost every single one of those instances, we've also got the number one brand in the category as well.
Important in order for us to be able to build brands that matter in the future. And we really do believe that big brands matter, also enormously valuable to our retail customers as well as a result of it. You heard yesterday quite a bit about running distinct divisional strategies. And I hope that that comes to life in the markets that we deep dive on today because we really are running these 3 very different businesses. And I focus clearly here just on the 2 largest ones given that Home Care is so relatively small for us.
And I think it's important and you are probably well aware of this that our BPC business and our F and R business are in quite different kinds of markets. Our BPC business is super well positioned in that 3 quarters of that business is actually in momentum segments in the market. We've been continuing to drive our leadership in D. O. S and in skin cleansing there.
And sorry, we have a job to do as far as turning around our hair care portfolio. And I will speak more later on about where we are and what it is that has been at the root of some of the declines that we've seen in the hair business this year. Our food and refreshment business is very much focused on turnaround and also unlocking margin in some segments. Divesting spreads was an important move for us and a big move given that we were also the largest market for the spreads business. We've been very focused on regaining our competitiveness in dressings.
That is a highly attractive and important business for us and I will share in a moment where we are on it. When I was coming in here just 2 years ago and I attended the last of the events that we had in my previous role, you'll remember that there was a lot of discussion that we had around ice cream and where we were and disruptive new entrants. And we have been super focused on accelerating premium ice cream. And again, I will talk about our status on that. And then tea has been a challenge for us.
We had a question on that, I know, yesterday in the plenary session, where there's a job to be done on transforming it, but where the real unlock comes from recognizing that as the tea category evolves into areas like herbals that the Lipton brand itself can't do all the jobs that you need to be able to drive growth. And therefore, the acquisitions that we've made of smaller brands that are truly complementary to our Lipton brand put us in a stronger position than we've ever been. And again, I'll talk about where we are. Now having said all of that, and I'm sure the question that is on your minds, if I was you, it's a question that I would be asking and some of you have asked me it already, is you've done all of this portfolio change, so why is this business not growing? And if you look at the 5 year CAGR, we've been hovering around the 1% mark.
If you look at our results so far, you could call that, I think, broadly flat. And so I wanted to really, phase into that. And I wanted to at least give you a perspective that says we have addressed an awful lot in our business that have been chronic issues. And when you look at this year, what we have coming together are really 3 acute issues. U.
S. Hair, the competitiveness of our dressings category and ice cream. So let me spend a moment on each of them. We have our U. S.
Hair business is declining mid single digits, and that is primarily being driven by the fact that in our TRESemme and Suave businesses, both great brands, both brands that we believe are important for our portfolio going forward. We have missed when it comes to innovation to be very candid for the last 2 years in a sector of the beauty and personal care market where innovation is arguably more important than it is in many others. But also, I think a fixable issue as we go forward, albeit those things take some time when you look at how long it takes to do things like category resets. Dressings, we've talked about also in our quarterly results updates. It's a battleground, but it's an important one for us.
It's one that we have been determined that we will defend and that we will grow our position in with both the Hellmann's brand and then also having the Sakhensington's business, which has been a nice little acquisition and again very complementary to Hellmann's. And then on ice cream, this is a business where given the input cost pressures that we saw on this business, we made a choice to take list price. And I think you'd agree with me that it's not atypical that in the period when you do that immediately afterwards, it has an impact on the promotional phasing of the business and landing it with consumers. We also had some consumer sorry, some customer service disruption in Canada that we have been recovering from and are putting behind us. So those 3 acute issues really take away from some important successes that we have.
And there are 4 that I wanted to land with you today. Our Dove master brand really goes from strength to strength. It's growing in every one of the categories in which we compete. Again, testament, as I said before, to the fact that big brands really matter and big brands grow. So growing 4% in the 1st 9 months of this year.
And similarly, our deodorants category, which has really been a powerhouse for us also continuing to grow at 4% in the face of increased competition. And we've brought some very strong innovation, including the launch of Dove 0 into that category. Yesterday, we talked about our home care growth. Home care, mainly 7th generation, but also the Love Home and Planet brand that we've been incubating this year growing at 21%, so well ahead of the green cleaning category growth rate. And then I think a standout success for our e commerce business growing at 47% year to date.
That is higher than the rate of growth for the market, which we're estimating when you look at all the data sources at around 30%. And I hope one of the proof points that that trading gap that we have in e commerce, we are starting to close. RJ is going to talk more about how we look at that. And then some really encouraging green shoots when it comes to the same acute issues that I spelled out before. So our plans on dressings are working as we intended them to work.
We grew our dressings business at 4% in the Q3. We saw our market share in Q2 shift from negative 60 bps to being up 90 bps in the last 12 weeks. So again, this is a plan that we had that's coming to fruition. In super premium ice cream, which we really believe is the most attractive part of this market, then we're also growing our share 35 bps. And actually, if you take the overall packaged ice cream market, not only premium, then we've also turned to slight share growth as well.
And then this amazing stable of brands that we have in Ben and Jerry's, Magnum and Talenti all growing at more than 4% in the Q3 as well. So I think that's a very different story from what you heard about premium ice cream when you were here 2 years ago. And hopefully, you have all been converted to these brands and you've had the chance to taste Talenti ice cream layers. That's the biggest innovation that we have in North America this year. And then tea, look, I think without it being a cop out, we have to say that we didn't get to where we are on tea overnight and it's not the kind of business that you're going to turn around overnight either.
But we are making really solid progress and you can see how that USG line is now starting to turn up And you can see it also in the share progression that we're getting including the IRI numbers that just came in this week. So we're still negative, but it's significantly less than we were when it comes to share. I referenced before that we have had a job to do in some of our segments when it comes to profitability. And I think that this is one of the big success stories actually of the North American business when you look at it over time that we have increased the profitability by 500 bps when it comes to UOM. You can also see the extent to which we've driven up our cash productivity.
And when Graeme talked yesterday about the €2,000,000,000 of savings projects per annum that we're driving through 5S, 0 based budgeting and the change programs, then UOM really reflects us doing at least our fair share towards Unilever's aggregate delivery of those. So having laid out the context the results, I wanted now to talk about our purpose led future fit strategy and how that applies to North America. I wanted to focus specifically on purposeful brands, on winning channels, on our digital transformation, all obviously underpinned by cost and operational discipline, and then talk a little bit about people with purpose and an agile organization. So purposeful brands, we're really focused on how our brands deliver against 3 key pillars of our sustainable living ambition. How they deliver against improving people's health, confidence and well-being.
How they contribute to improving the health of the planet and how they contribute to a fairer and more socially inclusive world. And I think that we could argue that this has never been needed more in the world than it is now and it's certainly from a U. S. Perspective never been needed more than now. David Jones talked at our dinner last night about activist brands.
And I would like to say that in a world that we're in danger of having purpose washing when it comes to marketing, this is not just about being activist for the sake of it. This is around us having genuine impact as well as having genuine performance. And so I could probably talk all day about what we're doing on these brands, but we have a very short video that I thought would do a better job than me talking about it, just to show the kind of way in which we are truly having an impact here in the U. S. So let's take a look at the video.
I was at school the first day and the teacher asked me in front of the entire class if my hair was real or fake. 1 of the staff members told me that I had to get that stuff out of my hair. I went to school feeling really self conscious because I felt like I wasn't worthy. And
Every kid who gets set up for and helped is a powerful move.
Your hair is something that you should be proud of and not shut it high.
We see it every day. Climate change is here. At 7th Generation, we strive for true sustainability and equity. But with consumer use of our products representing 92% of our footprint, it's not something we can solve alone. Only through a systemic shift to renewable energy can we drive the change we seek.
So last year, we partnered with the Sierra Club's Ready for 100 campaign and mike.com to advocate for renewable energy for all. And it worked. With the help of the Sierra Club, 7th generation and hundreds of community partners, over 100 cities have committed to 100 percent renewable energy. Sustainable and equitable place for the next 7 generations.
Parents have to make the impossible choice between their new child or a paycheck, because the U. S. Is the only industrialized nation that does not have a federally supported family leave policy for men. Dove Men Plus Care, dedicated to expanding opportunities for men to care, is on a mission to change that by changing federal legislation to make paid paternity leave the new standard for all dads. To fight for change in Washington DC, we're connecting with real
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And I can tell you there are many other examples that we could have put on that reel, but I hope it gives you that sense of impact. And remember, these are all brands that are growing not only faster than the Unilever global average, but faster than the categories in which they compete as well. Plastics leadership, really important, not only because of the commitments that we've made globally as Unilever about where we'll be by 2025, but because our consumers and society more broadly is holding us to account and we hold ourselves accountable on this. I've communicated already externally that our exit rate for our business here at the end of 2019 will be with over 50% of our plastic being in post consumer recycled material. That was a huge lean in that we made.
We're also really helping consumers to understand how to recycle. There's an education job that needs to happen. And still with estimates of how low recycling rates are in the U. S. Of it being anywhere between about 20% to 30 percent and very dependent on municipality, we're also founding members of the closed loop fund making investments into recycling infrastructure.
1 of the other key pillars that I had on the chart that I wanted to talk about is around how we are future fit is around how we win in channels and specifically in e commerce. I'm not going to go into this in a lot of detail because I'm in danger of stealing RJ's thunder on it. But I think important that when we talk about e commerce, and I might be preaching to the converted on this, important to recognize that there are differentiated models when it comes to e commerce. And I hope that we will demonstrate a good understanding of how we play in omnichannel, how we compete in pure play. You heard yesterday about Ice Cream Now.
And then we also have businesses, particularly our Unilever Food Solutions business that play in the B2B market. Being able to win in this really requires us to have design for channel capabilities. That is around having the right portfolio when it comes to assortment. It's around having the right supply chain to be able to deliver those products efficiently for very different distribution systems. It's around being able to drive the content and conversion models, some of which you saw yesterday when you saw the digital hubs.
And of course, it's around how we then get out and execute that. The U. S. Is one of Unilever's lead markets for digital transformation. You again, you saw that in the breakouts yesterday.
But for us, this truly is around how we rewire our business digitally end to end, covering areas like future fit operations, digital supply chain that you got a snapshot from Mark yesterday on, but it's also around the employee experience of working here and how we use technology to support. We're really building meaningful relationships at scale with consumers. And when we look at some of the metrics, I know some of you had questions about that yesterday, then we're seeing anywhere between a 30% to 50% engagement rate lift as a result of the PII data that we have and being able to be much more targeted in our communications to consumers. We're an organization that is around people with purpose. We genuinely believe people with purpose thrive and that that is absolutely critical to us being around brands with purpose that grow.
We have 80% of our employees here who've gone through purpose workshops so that they can really understand how they're able to bring all of themselves to what they do here every day to grow the business and to have an impact. We're also an organization that's recognized for us to be able to move at the speed that we need to, to be able to lean into the digital opportunities that we have, we have to become a much more agile organization as well. So we'll have 100% of our key leaders that will be formally trained in agile methodologies by the end of this year. And we have also trained all of our key cross functional innovation teams in lean like a startup methodologies. And that's giving us about a 25% faster time to market and arguably will set us up for the future to be much more consumer centric in our innovation as well.
So with that, I hope I've given you a sense that our purpose led future fit strategy really is our route being able to win in America. I hope I've given you a sense of how to interpret the results that we have. I'm going to hand over to RJ Salpica, who is a member of our U. S. Customer Development Leadership team and our Vice President for E Commerce to do the deep dive on e Commerce.
And then I'm going to come back up with him to answer questions that you might have about the North American business. All right. So, OJ, come on up.
Thank you.
Good morning, everyone. I'm excited to speak with you about U. S. E commerce today. And the best way to talk about this is actually not to start with the Unilever business, but to start with the macro.
What does the marketplace look like? And the best way to relay context in the marketplace is actually to start with where we were, so we can understand where we are today and where the market is headed in the future. So we'll start with this artist rendering of the past, just about 5 years ago, when U. S. E commerce was still at its infancy.
And if you were in FMCG land looking at the landscape, clearly the biggest show in town was the Amazon dotcom platform, so core.com. And there was a thriving subscribe and save offering on that platform. But still no at scale offerings for grocery or cold chain products, ice cream for instance. And while there were a few other retailer.coms, they were not a credible substitute for the much better in store experience. And so if you were looking for a category such as paper or household goods, you might find a way to meet your needs.
But if you were looking for food or grocery oriented trips, you didn't have very many options as a consumer, much less so for ice cream. And we play a large role in the ice cream category and there wasn't really a path. And so what's changed today? Most things. A heck of a lot has changed in the last 5 years.
What you see here is visuals of what the marketplace looks like, both for CPGs, but also consumers. On the top left, you have Walmart's online grocery offering. Walmart now offers grocery pickup, but also grocery delivery and have recently launched delivery unlimited subscription plan for all you can eat grocery delivery in certain markets. And consumers are adopting it in droves. On the bottom left, what you see is Meijer curbside pickup.
Meijer is a regional grocer that's really strong in the Midwest. And that is similar to many regional grocery offerings that you see in the marketplace that simply didn't exist. And this has allowed many consumers who previously had not adopted e commerce, particularly for food oriented missions to participate in this new way of shopping. At the center of this is the Whole Foods acquisition by Amazon that certainly didn't start the evolution, but has definitely played a role in catalyzing it. And today, you see things that you wouldn't have imagined possible 5 years ago.
So the top center is essentially the Kroger Fresh experience, but within a Walgreens store, which is not something you'd have imagined a few years ago. But that's a sign of retailers willing to experiment to drive consumer adoption. At the bottom, you have an Instacart shopper picking from a Kroger store. And Instacart and demand aggregators like it play a very important role in bringing grocery pickup and grocery delivery to the masses. You also have large mass retailers like Target experimenting with multiple formats, next day delivery, same day delivery, drive up and in store pickup.
And you can imagine the options that this gives our many brands. You have the rise of demand aggregators and last mile delivery platforms like Uber Eats and DoorDash and Grubhub, which we do take advantage of. Physical assets and physical store oriented retail. So there's 2 key takeaways from this. The first is, if you're on the CPG side, each of these is a strong signal about the way the marketplace is evolving and it provides an opportunity for our brands to reach consumers.
And then if you're a consumer, you can imagine that with every one of these launches and maturations of these formats, it drives further consumer adoption, which is something that's very key to our brands. And so that brings us to the consumer angle of this. So there's many statistics we could share here, but there's a few key ones that actually determine how we with e commerce. The first is that a very large majority of search and discovery is now digitally oriented, whether it's searching through Google, it's the rise of product searches on retailer.coms, or it's actually consumers using their mobile apps and their web browsers while in a physical store to find information on the products they're researching. The second trend is that the need for convenience is being expressed through consumer search activity.
So the number of searches for same day shipping has doubled in the last 2 years. And you can imagine what this means as consumers because that drives the decision on which format you adopt and which brands you go for. And the most important thing here perhaps is the omnichannel effect that we're seeing today. And what we mean by that is that a consumer or a shopper who's engaged through multiple channels either by a retailer or a brand is simply much more engaged. And what we've seen time and time again in all the markets that we play in e commerce is that there's this classic Venn diagram of spend from a shopper who shops only in store and the level of spend from a shopper who shops online only.
But really it's the intersection of those two sets that has the highest value. So shoppers who are engaged through multiple channels spend more, but also spend more frequently. And it isn't by a factor of 5% or 10% or 15%, it could be a factor of 2x. And that also applies to our brands. And so when you put all this together, the role for our brands becomes very clear, which is that the way we win in e commerce is not just for our brands to be there at every stage of the journey, but actually to use the equity of our brands to drive adoption of these formats.
So you can example the role you can imagine, for example, the role that Knorr or Hellman's Best Foods play in bringing meals together, using the equity of that to drive the adoption of a click and collect format, for instance. So we've talked about marketplace and the consumer. Now let's talk about Unilever performance in that context. So what you have here is a firstly, a market view of the 5 year growth expected from the U. S.
Market total, but in categories that U. S. Unilever plays in. And so we estimate that of the $10,000,000,000 worth of growth in the marketplace, over 60% would actually come from e commerce. And that's click and collect, ship to home, last mile delivery, etcetera.
And within that context, the great news is e commerce is already the leading growth driver for us in the U. S. You can see that we have a 3 year CAGR of 40% growth for total U. S. And for those of you linking to Amanda's slide, you can see that this year itself, the growth rate is actually higher, which demonstrates that we are capable of accelerating growth in an already accelerated frame of reference.
And you can see that the growth rates vary across divisions. Personal Care and Home Care, those portfolios have been able to participate in e commerce for the longest. So those growth rates are a little bit lower, but foods and refreshments, so ice cream, mayonnaise, condiments in general have not been able to participate as much, but now they can because of the formats that are available. And so how are we able to make the growth rates happen? It's actually through intentional diversification and strategic choices across all the various modalities in e commerce.
And there's 3 ways we think about this. There is your click and collect oriented formats and missions, which are essentially store based. So it's pickup in store or it's drive up. Then in the center column, that's national ship to home, which has been the dominant model in the U. S.
So that includes grocery oriented missions like Amazon Fresh, but it also includes ambient missions like walmart.com. And then finally, you have the rise of demand aggregators that do demand aggregation and last mile delivery such as Instacart, Shipt, Uber Eats, etcetera. And so the diversification is important in a few regards. It's not just diversifying across our retail partners. More importantly, it's diversifying across the way consumers engage and also shopping missions because our brands want to be there for the fill in trips, the fill up trips, the experiential trips, the grocery oriented trips or the last minute convenience trips.
And so next we're going to just a couple of examples of how this manifests. So this one we've referred to in Anika's presentation and during the rotation that we just had yesterday. But there's a point I want to land here on why we're so interested in driving ice cream now. And that's because of the potential for incrementality. Because what immediate delivery of ice cream allows us to tap into is a whole new purchase occasion that may not be in the home, it may be at an event, it may be at a party, and that's an additional usage occasion that we're interested in.
And the second reason is, just as consumers, you can imagine yourself wanting something and then wanting something now and the higher willingness to pay that comes with that second occasion. And so in terms of just as a net revenue accretion opportunity, this is critical. This is a key example on omni channel and the hypothesis we had was investing in driving awareness and conversion of a brand online has some impact in store. And we actually ran a test with St. Ives on a large national retailer.com and the results surprised even us because during the period we ran the test, while there was a 6% lift, 6% of the lift was on online volume, 94% of the lift actually occurred in store.
And so that's a really strong indicator. And look, the most sophisticated way to do this would be to run multi click attribution models, but the industry is still evolving and those measures don't exist yet. But it's very clear that investing behind a brand online and offline to multiply that impact is the way to go. And then finally, I'll refer to the design for channel framework that Amanda talked about, but I'll bring it to life with just one example rather than going broadly. So let's take laundry for instance, a category in which 7th generation plays.
The classic laundry SKU in the U. S. Is a 100 ounce laundry detergent pack. And if you think about it, it's probably orange in color and it's somewhere on a retailer shelf and it's pretty heavy. It makes no sense to ship that around the country in an e commerce channel where the majority of volume is shipped to home.
It's very expensive. And so what we did in 7th generation is a perfect example of design for e comm. So I'm going to borrow this for a sec. And what the brand came up with was the 8x Ultra Concentrate. It's only about 50% of the water usage.
It's 60% less plastics usage and it's 75% lighter. And it has a dosing regulator, which makes it easier for the consumer to meet out just exactly what you need. And so this is a classic example of future fit portfolio with content and demand creation techniques and really good execution. And unsurprisingly, this one product became a double digit percentage of the business in less than a year after launch. You can remember from yesterday, e commerce is a double digit percentage of 7 Generations business as a whole.
So that's a very classic example of design for channel innovation and the path to continued competitive sustainable growth in this channel is to do that for all brands with the right fit across fulfillment models and retailers. So that's it for e commerce. Amanda?
All right. I think you're going to stay up here with me, right, Ajay? Yes. So we wanted to throw it open for questions both on Ajay's session and as I said before on anything from the North American presentation that I gave earlier. From the North American presentation I gave earlier.
Good morning.
Good morning.
You talked on one of the slides about some of the green shoots. But specifically on Hoeghor, can you share with us what plans you have to improve the competitiveness of Tresame and Suave and the time line? And secondly, also if you can share with us any learnings from the share loss that you've seen there. I remember 2 years ago, when we were here, we were introduced to the CCBT teams that were supposed to making a lever closer to the market, more responsive. What have you learned from the mistakes in that market?
Thank you.
Okay. So I wouldn't like to give you the impression that what we are doing about it is all to come. It was clear in the first half of the year that we weren't where we needed to be. We talked about that in our Q2 results call. We have changed our plans that are in play at the moment for the second half of the year.
That included putting additional investment into the plan that we're hoping that we will see the results from very soon. I think, as I said before, the key thing is this is an innovation intense category. It always has been. And these brands were built on very strong innovation. And we've had a couple of years of mis firing and that's what we're very focused on resetting for the future.
I do believe that we have stronger innovation in the plan for next year. And as far as the CCBTs are concerned, I think you have to remember that this is the same CCBT that developed Love, Beauty and Planet, which has been one of the success stories that we have in hair care as well. So that's why I'm really trying to isolate it to say it's around these 2 brands, and we're working hard on how do we change them. Now these are categories, I think most of you know this as well, that are typically set by retailers only once a year. And so I want to caution in the sense that you can really turn on a dime sometimes on these big categories when you're really trying to change the planograms as you bring innovation as well.
But I'm confident that we have the right team on it. I'm confident that we put the right measures in for the balance of this year and that we've got stronger plans for next year as well.
Celine Panetti, JPMorgan. I wanted to understand on dressing. What drove that fast turnaround in market share and how sustainable that is? And on ice cream, could you say what is the percentage of premium versus mainstream? And what's happening on the mainstream front in order I mean, to fix it if it's fixable?
I don't know. I mean, you're focusing on super premium. I appreciate that. But do we have a drain from coming from mainstream? Thank you.
Yes. So let me talk about dressings. And really the thing that has turned around our plan has been around the phasing that we had relative to the previous year and increasing our competitiveness in the plan. And so is it sustainable? I hope it's sustainable.
I hope that you'll read it as its testament to the fact that this is a category that we have been in for a long time, over 100 years. It's important to us. We will continue to defend it as one of our real jewels. And we will continue to drive it by doing the right things, not only around how price competitive we are, but by the kind of actions we've taken. Remember, this is a brand that brought cage free eggs to this market and actually transformed the industry at the same time as we did it and is one of the most loved, most we with our customers as well.
So on ice cream, I referenced a little bit what we're doing on the mainstream of our ice cream business when I said that we took price. And obviously, this is about how do we make sure that we've got a category that is set up well for the future. So that is in line with the ambition that we set for it. And then it's actually in the ice cream novelties that we saw some of our share erosion really. And again, that's choices that we made.
And again, I think an instance of one of our Ben and Jerry's innovations not performing as well in market as we'd expected it to. But you've got to offset that with the fact that the totality of the Ben and Jerry's brand, what we've been doing in Kors, what we've been doing by bringing chunks as a separate item to the market is performing very strongly for us.
Thank you.
Chris Pitcher from Redburn. You're not alone in having a plan to improve your North American business with a strong innovation pipeline. And you mentioned that it's only infrequently the retailers do the resets, etcetera. Can you give us any encouragement that what you're seeing is based on early conversations with retailers that you've got the opportunity to go in there because there's a lot of people putting a lot of money behind a lot of innovation for next year get North America growing fast again?
Yes. Look, I don't think I'm allowed to talk about specific customers or specific points of distribution, 1. But when I said before that I'm confident in our plans making traction for next year, then obviously it's based on what we already know around areas like points of distribution. It's also based on what we already know from consumer testing around the strength of the propositions that we have and it's based also on the kind of investment levels that are being planned as well.
Hi, Amanda. On this side, Warren Ackerman at Barclays. 2 from me. You said that the growth rate for North America was 0.2% for the 9 months. Could you tell us what the category growth, the weighted average category growth would be for North America?
Just trying to understand, is it 2, 1, 2? And then the second one is on premium. What percentage of your North American business would you say is premium? Is it a big enough percentage? Is that something that you're focused on?
Because it seems like to me, what you're seeing is trading up and trading down and some of your categories are quite mass markets and suffering.
Yes. So look, I think in a world where the channel landscape is changing so dramatically and you've got shifts online, which are quite different when you get into it in the subcategory level, then the growth rate weighted across our categories is in the 1.5% to 2% range. I'm sure you are seeing it in your data as well. If you look at the most recent periods, there's been a bit more of an uptick in the food and refreshment categories and there's actually been a bit more of a downturn in the beauty and personal care categories, which is different from that 3 year CAGR that I referenced before. If you then look at what is happening as far as the market is concerned, you're right.
And there is I mean, there's bifurcation every which way you look at it when you start getting into the granularity of what's going on in the U. S. Market. And it also explains what is happening as far as the shifts that are happening. And I think it is around playing in both.
So have we been building a premium portfolio? Yes, we have. And remember, the Prestige majorly U. S. Centric business.
If you look at what we've celebrated today on results, then we talked about premium ice cream. We've talked about our Dove brand, which is also at a premium to the category as well. And so we'll continue to look at where we have the opportunity to be able to trade consumers up to stronger benefits. But it's also about making sure that we are able to provide access to our brands and our product portfolio to consumers at the value end of the market. And again, when we look at some of the areas that are growing just in our business, that is actually one of the areas that is as well.
That is not about giving people cheap products. It's actually about being able to give people access to quality brands and products that they love. An awful lot of what we're doing, you can imagine from a channel and customer perspective is to really understand how do we best partner with our customers to be able to hunt out these pockets of growth that are increasingly at the top end, but they're increasingly at the value end as well.
Amanda, I think you showed up a slide there with the executives of the kind of the U. S. Operations. And I think you said there's more American flags than there's been. But also in the last day of being here, I've also got this perception and there's also a lot more external hiring that's going on.
And how is that manifesting itself in the changed culture of Unilever North America? I mean, given you're a long standing Unilever executive, how do you what differences is it making? What is it bringing to the table?
Yes. I think it's interesting that you picked up on that in being here for 24 hours because as I started, we are a really proud business and proud of our people and proud of being an inclusive culture. So what I think is happening, look, people want to join Unilever. People want to join Unilever because of what we stand for. And people join us because of purpose, whether they're at the beginning of their career, whether they're in their mid career, and it's also the reason why people stay as well.
We have also recognized that we need to accelerate our talent development in areas like digital and that that has required us to bring in people with really different backgrounds as well. So we didn't have the chance for everyone to give their bio. I hope that RJ wouldn't be embarrassed when I give him as an example that he worked for Microsoft and Amazon before he joined Unilever and technology backgrounds. And a lot of the talent that you'll have the opportunity to meet with in the digital hubs are very specialized talent, and we are doing a combination of upskilling. So we use Degreed as a platform and really, really actively encourage and look at how people are upskilling, but it's also about bringing fresh talent in.
Important in a country that is as multicultural as the U. S. Is that we represent our consumer and customer base as well. So our efforts in DNI that I think are being recognized are part of that as well. Thank you.
All right. I am getting the time to close signal from Richard. So I look forward to answering any other questions that you have at the break. I think we've got Q and A panel at the end if there's anything else on this. And so let me now bring up Rohit Jawa, who's our EVP for North Asia and a dear colleague of mine on the markets team as well.
Rohit, over to you.
Thank you. Thank you, Amanda. I'm really excited to be here. Good morning. Really excited to be here.
I'm in my 3rd year in China. I lead the China business. It's really the most exciting time of my life. Really enjoy my sit there. I'm joined today by 2 of my colleagues, Baifeng Lo, who runs the custom development function and recently the e commerce function and also by Fang Jun, who is our Head of Data and Digital, looking at this vertical for the China business.
So thank you very much for giving us the opportunity to talk through this exciting growth journey that we are going through. And before I start, I'd like to request you to note the Safe Harbor statement. And just to give you a sense of what we're going to do today, I'll walk you through the macro context, the consumer trends, our business and what we have built in China. We'll talk a little bit about basically our track record, our growth priorities and why we think we have a really great chance to keep increasing scale in this very, very important market in the world. So let me first start by a little bit of a macro context.
So as you all know, China is growing at about 6 odd percent on a very, very large base. And even though the growth is softening and moderating, it is still a lot of growth and a lot of opportunity, certainly for players like us. And every year, China adds close to almost a country on the GDP base that it has of 14,000,000,000,000. Consumer confidence is strong and driven by the services sector and consumption, therefore, is growing at about 7% to 8%, which is pretty healthy and throws up a lot of opportunities. Coming closer home to our business and our markets, our markets are and the markets we play in are roughly growing around 6%, a little under 6% and are mainly being driven by online growth.
The online growth, online share of the total markets that we play in is a little over 20% and is growing at about 25% or thereabouts. And really, this throws up a key priority for us to focus on e commerce as a primary lever of growth. And this growth is going to continue. China's PCC per capita for a couple of categories that I mentioned there is still very low compared to some of the developed economies like Japan and the U. S.
And by the factor of almost a 5th. So while China has been an exciting consumer story of our present times, it's got many, many decades of excellent growth coming through certainly in our categories. So we see this as a very significant growth opportunity for Unilever in the consumer goods market. I'd like to just spend a little bit of time on the consumer trends and what's changing our consumer in China. And there are 2 really powerful themes.
The first one is digitization and the second is upgradation. Let me spend a little bit of time on digitization. So 3 really key aspects of digitization. Firstly, consumers in China are completely living a digital life. Something like 800,000,000 consumers have smartphones, spending close to 5 hours a day with something like 30 applications on an average phone actively used for commerce, for entertainment, for services something like 600,000,000 consumers in China are using the mobile phone to shop, to see videos and to make payments.
Something like 500,000,000 consumers are gaming on phones, 400,000,000 consumers are ordering food or shopping for travel or trips on the phone. So really, digital is everywhere. The second driver because of is really is omnichannel and the change in the channel structure. Over the last 4, 5 years, given the growth of online and the need for convenience, the online and the small stores in the neighborhood type proximity are growing at the cost of high prison large stores. The second big trend in China is digitization of the offline world, really driven by, first, the big platforms like Ali and Tencent, but also they're now closely followed by all other groups.
And everybody is jumping on the bad banger of essentially digitizing their omni channel stores. So we see today a lot of the growth of the offline stores are really coming from home delivery platforms, apps and so on and so forth. And that's really where the new offline channel is evolving. The second important factor in China now is omnichannel. Something like 40% of the Chinese households in urban areas shop more than 7 channels on the average.
So for us to win, we need to operate across not just the big growth channels like online and convenience stores, but also across all channels. The 3rd important factor of note is media. Of course, everybody now knows and should know that 80% of all media in China is digitized. But off late, in the last 4, 5 years, we see increasing fragmentation, a huge rise of social. And through this 45 minutes that we have, you will hear a lot about KOLs, live streams, celebrities, and social is very everywhere.
Social media now is a large chunk of the spends. And e commerce, which in China is not just shopping, but it's also entertainment. It's a place where consumers spend a lot of time and talking just after Double 11, it makes all the sense. A large part of the media spend is also now going into e commerce. The second big theme is upgradation.
There's something like 500,000,000 consumers in middle class upgrading, aspiring for a better quality of life. And it's everywhere in China. That's driving 3 big changes. First is around how consumers are changing in their aspirations. And we in Unilevera have picked on these 6 important trends because a lot of our innovation, our strategies have to essentially drive and be on trend.
The first is the need for personalization. The second, the growth of subcultures, the gaming culture, the animation culture and so on and so forth. 3rd, consumers are looking for not just products, but really experiences. They want to really get the sensorials, everything. The 4th important driver of consumer trends is China pride.
National pride is really important in China. Convenience, I want it now, I want it where I am, I want it. And that's really, really important. And that, of course, is convenience is the mantra on everything in China. You want it really done in the next 30 minutes, 20 minutes and thereabouts.
And a very important development is health and wellness. Balance of life is really something that consumers are looking for. The second driver of consumer change is the rise of low tier cities. Our low tier cities are something like 60% of the market and population. And we see more growth roughly twice as fast in per capita incomes that are also across categories online and offline happening in the low tier cities.
And this is really where the new penetration and new growth of China is going to come as the economic prosperity and the economic activity shifts to cities outside the big four or big thirty. And of course, given that consumers are getting more sophisticated, the expectation of choices is increasing, and we see a lot of new brands entering categories. To give you an example, in the hair category, something like 200 brands in offline and 500 brands in online enter on the average every year. But an important point to note is that a really very small percentage of them, about 1% to 3% really last more than 2 years. So there's a whole lot of churn.
And the big brands that essentially remain dynamic, remain relevant, salient and on the ball tend to also grow at the same time. So there's opportunity both for small brands and for big brands in China. So that's really the context. Now coming closer home to Unilever. Unilever has been in China for about 100 years and above.
In fact, our first company in China was built was incorporated in 1923. In 1986, we reentered China. And for the last 30 odd years, we've been consistently investing in China, manufacturing facilities across the entire geographies, building our 6th global R and D center in China with 3 50 plus scientists and making a portfolio stronger through acquisitions over the last several years. And today, we have built a business in China that's really a scale business. We have world class manufacturing with 8 sites, 90% of our products are made and sold in China, and we have more than 30 third party and growing manufacturing design firms that we partner with.
Our reach in China has is 80%. We have 800 odd distributors, 26 logistics centers and 30 key account relationships. In fact, of the top 8 big accounts this year, including actually overnight, we've been selected as the best supplier. In fact, last night, Walmart appointed us awarded us the best supplier award just this evening last evening. So we have 4 out of the 8 key account relationships, we are the best supplier in 2019.
And on digital commerce, which is really where the big tailwinds are, we have built a strong business. We have strong capability. More than 25% of our business now is in e commerce, and we have a dedicated team of 200 people on this vertical. And you'll hear more about that from my colleagues. So another important aspect of China is our unique value proposition for the employees.
We are a Chinese company in China. 11 of our top twelve team would sit on the top China leadership team are Chinese. I'm actually the only one who is not Chinese. 97% of managers are local. We have 1,000 strong alumni.
We have been awarded the best employer of choice in FMCG, number 1 position for the last 2 years. And just a little while ago, we were also announced as the 3rd the same number one FMCG Employer of Choice. So we are 3 years in row as the one FMCG Employer in China. And our engagement scores are extremely strong. We have close to 90% engagement score, driven really by 3 big drivers: growth mindset, career development and well-being.
And we have a very diverse team. We have gender balanced and a very, very large percentage of our employees are below 30 years of age. So we have a very, very strong value proposition for employees in China. So how have we done? If you look at over the last 9 years, we have built a business of close to €3,000,000,000 Our growth rates are on the average between 8% to 9% over the last 10 years, and we have also been increasing our profitability in excess well in excess of 100 basis points every year.
So we feel we have a very, very strong momentum. We are well broadly diversified. We are roughly onethree each between food and refreshments, Home Care and Beauty and Personal Care. Beauty and Personal Care is a little bit over weighted than more than onethree. So we have a nice, lovely business, well spread across our 3 divisions.
We have great brands. And rather than me just talking about that, I'd just like you to note a couple of facts that I'd like to show you a small video. We have more than 35 brands in the market now. 9 of our brands are more than 1,000,000,000 RMB in scale, and we are in 8 out of 10 households in China. To give you a sense of how we are bringing our brands alive in China in a Chinese way, I'd like to present the short video collage of our brands in China.
Of 3
generations. Clear enables the youth to clear doubts in their head and win with unbeatable performance. Dove encourages women to break beauty stereotypes and freely express themselves. Luxe inspires women to rise above judgments and shine without limits. AHC brings the joy of beauty with unmatched expertise of Korean aesthetic spas.
Vaseline supports women to fully participate in life with beautifully peeled skin. Omo encourages people to get dirty and immerse themselves in full life experiences. Comfort enhances anywhere value of real connection. And Knorr frees chefs to love what they do. Over the years, we have helped to improve vaping habits, ease washing chores, raise beauty standards, enable better cooking and make our consumers look good, feel good and get more out of life.
Unilever is China, for China.
Our winning mantra in China is do what it takes to win. We call it China for China. So we have 4 big belief systems. We got to decide in China, design for China, move at China speed and do it the China way. These are the 4 belief systems that drive us.
And our growth strategy is quite simple and sharp. We have 3 big growth drivers and 3 enablers, and I'll just give you a brief flavor and then delve a little bit deep on that. 1st, grow the core brand penetration. 2nd, build a future fit portfolio. 3rd, go digital, go deep, go wide.
And enablers, 3 big enablers in the organizational model, Grow Power and Run, fuel for growth through our savings programs and, of course, driven by our sustainability agenda. And I'll double click a little bit on each of these 6 pillars with the help of my team. First, growing the core penetration. 10 brands in our business are 80% of our business. These brands have to grow.
And our formula for growth is quite simple, get more new users all the time. And the 3 levers to do that. 1st, superior products. We got to have products that consumers find better in use. And a great example of that is our OMO brand, 100% of its formulations, of course, designed for China, are superior than their benchmarks.
The brand is doing extremely well and is having in excess of double digit growth over the last several years and getting market share. The two other drivers of growing core brand penetration are what we call mental availability and physical availability. Mental availability is really be salient, top of mind all the time on our consumers. A great example is our Dove business in skin cleansing, where we've got these beautiful skin stories that have kept the brand really top of mind, talking in a relevant manner with our consumers in China and has given the brand the number one brand power position in skin cleansing category in China. The 3rd driver is physical availability.
Be available in widest of places for all occasions. It's as simple as that. Our Food Solutions business, which is a powerhouse, has a really cool coverage, 600 cities or a 1000000 restaurants directly and indirectly covered and close to 2,000,000 chefs on their WeChat community constantly interacting. So really being available is the 3rd driver. Through these three drivers, we need to drive the core brand penetration to really get most of our growth.
The second driver of our growth really in 2 parts is premiumization, future fit portfolio through premiumization. We have really we know that the market is upgrading. Consumers are essentially wanting to get better products, better quality, better features. And our formula is quite simple, really make sure we drive this by participating from new brands, new benefits and new formats. We've launched close to almost 10 new brands in the last 2 to 3 years.
Love Beauty Planet, Love Home Planet have had a very good start. Love Home Planet, in fact, has now recorded in the 3rd or 4th month a very, very strong share. In new benefits, we've launched close to 25 new variants, on trend variants, picking on the basic big mega trends like naturals or indulgence. A great example is the naturals range from Luxe, doing extremely well. And also, of course, our Magnum brand, that's really rocking in China.
And new formats, Dove is a great example. We've launched close to almost 5 new formats and consumers want new regime new formats and Scrubs, Mooses, Foams. Scrubs, for instance, has done extremely well in this Double-eleven just ended this week. So premiumization, roughly 40% of our portfolio is what we call premium. That's above 120 index of the market.
The second driver of premiumization is really building a strong scale skin business. Skin care, as you all know, is a very exciting and a very big market in China, something like €27,000,000,000 to €30,000,000,000 growing nearly double digits, spread across the price spectrum. And we're building a very strong portfolio in where we have unique benefit spaces and a clear right to win. And this is in the upper mass and the mass premium end of it. We've got, for instance, already a strong position with Vaseline.
That's number 1 body care brand in Tmall. We are the biggest portfolio in facial wash in Tmall with Dove and our PONS brand. We have got the number one volume brand in Tmall Global with AHC. In fact, this Double 11 has become the number one value brand as well in Tmall Global, and we've just acquired a small, but a very nice business on Japan Beauty, which has got very, great brands. Off note is a brand called Tunecres, a serum range, really, really excellent quality.
So we're building this business, scaling it up in China to participate in this very exciting market. And of course, this doesn't include our prestige business, which with the animal testing regulation, deregulation, would also have a big upside in a market like China. Before I move forward, I'd like to now request at this stage, Baifeng Lo to take us through the Go Digital, Go Deep and Go Wide part of our strategy. Bai
Feng?
Good morning. I'm Bai Feng. I'm the Head of Customer Development team in China. And before I start, actually, I just want to let you know, if you remember Peter from yesterday, Peter have been given the same brief, yes? So I won't be cheated, but hopefully, yes, just bear with me.
So I'll go through a couple of charts actually on channels and what we're doing in China on channels. So as Rohit mentioned, digitization and e commerce are actually very important to our growth in China. Our e commerce model, if I go to the next chart, actually consists of 3 parts, right? So that's business to consumers, that's omni and O2O and that's business B2B. So the 3 added together are actually already 25% of our sales and growing at a rate of 30%.
So if we look at B2C, B2C obviously is the biggest part of what we've got, where about 85% of our sales is actually from our B2C channels. And for omni and O2O, we are actually forming very strong relationships over the past 2 years with some of these players like JDDJ, Dmall, Taoxian Ta and also Tencent, while we are actually leading in this space actually for this year. On the B2B side, we're partnering with 2 of the biggest business models through Alibaba and through JD to be able to help us to accelerate in this space. So when we look at B2C, we actually have very 2 large customers. 1 is called Alibaba and 1 is called JD.
So in this very competitive space, what is it that we are doing to actually be able to stay competitive and to be able to go ahead of these customers? So when we look at B2C, we say we have 3 pillars to actually help us grow in the space. So that's one part where it's a portfolio that's designed for channel. Now we know that innovations are a key part actually to the growth of the business in e commerce. And to date, innovations actually already contribute to about 60% of our growth on the channel and in skincare sometimes even more, a little bit more than that.
However, there are also spaces where we know that we have to do more of and we need even more trendy innovations. For example, in hair, we want to actually be able to pay more in the premium and super premium sectors of the hair market. In laundry, we continue to drive value density through our focus actually on capsules and also on concentrates. The second pillar, which is very important, just having done Double 11, is actually having good content to be able to drive higher purchase conversion. And we know that in this year, the buzzwords have been actually live streaming.
So I think I can share, but I'm happy to report that in the recent Double 11, about 12% actually of our GMV already comes from live streaming this year. And last but not least is actually the perfect execution part, which is very important for us. So when we talk about execution, what we say is that we want to be found through search. We actually also want to be seen through a bit of our banners. And then more importantly, we want a lot of personalization.
And we actually have a group. We have an active program of managing our fans and memberships. And in Alibaba, 20% of our sales actually comes from our fans. And actually on JD, a little more like that, about 30%. So we in the recent couple of days before like 3 days before, we have actually added about 7,000,000 new fans to both of these ecosystems, which will actually enable to drive us get more growth in the future.
And last but not least, we really have a very young and talented team. I'm probably the oldest, but hopefully I'm young at heart. So even before I go further, I'll try and show you a video on how we can actually bring this to life.
55,000,000 digital consumers seek novelty, convenience and a great shopping experience. To win in digital commerce, we have 3 pillars to stay competitive. Firstly, a portfolio that is designed for the channel. Over the last 18 months, we have launched more than 30 innovative and on trend products into premium segments. Secondly, by creating engaging content, we drive higher conversion to purchase.
Our marketing investments into short video apps like TikTok and kuai show has increased by 60%. We create strong engagement through the use of influencers with more than 30 celebrities, around 130 KOLs and 1500 micro influencers in play. And we have also built our in house live streaming studio, generating incrementally 600 hours of engagement. 3rd pillar is perfect execution, which is realized through personalization. We have extensively used machine and AI capabilities to help us optimize and personalize content in real time shoppers through active membership engagement.
These 3 pillars are supported by great people. We have a winning team of which 70% are born in the 90s and 20% are recruited from leading digital companies. Unilever will continue to lead the growth in digital commerce.
So hopefully, that gives you a sense of what we're doing on the e commerce area. However, while we continue actually to drive growth out of the channel, we know that China is still large and diverse and fragmented. So then there are other things that we need to do. So Rohit mentioned, we are going digital, we go deep and we go wide. So when we talk about go deep, really it's about reaching more stores and getting to more lower tier cities.
We have cemented China into 300 city clusters, out of which we are choosing to focus on the top 100. Why? Because the top 100 actually already accounts for 50 percent of the urban population. And we've got a plan actually to be able to reach these 100 cities over the next 2 years. On the other hand, we how do we actually get to these cities?
And what is the way that we are doing in terms of route to market? We actually have 4 models. So on the right side, you will see we are going to coverage to our core distributors. We have our expansion distributors, which Alan mentioned yesterday, is growing at a rate of 25% and a like to like of 11%. We are appointing specialized distributors to actually help us go after cosmetic stores.
And also, we are working with the 2 giants like Alibaba JD to be able to work through their systems to get coverage into the grocery stores. So today, we are close about we are slightly above 500,000, 550,000 in terms of store coverage. We want to get to 800,000 next year and finally getting to the 1,000,000 to achieve the target. The other place that we actually need to be is actually in growing right. And what do we mean by this is really getting to channels, which are actually growing faster.
So we are highlighting 2. That's one part where it's health and beauty and cosmetic stores, which I call beauty in general, and the other part actually is out of home. So in the beauty stores, we are actually one of the things that we need to do is really also getting portfolio that's designed to go after the health and beauty and the beauty stores, so especially in skincare. In health and beauty, Watsons actually is the largest modern health and beauty retailer as you will know it. And this year, we have just got awarded actually the supplier of the year award just 2 months ago a couple of months ago and we're really proud of it.
On the other hand, on the outer home, we actually have a very professional team of food service operators and also food service channels that are actually operating across the restaurants and also the hotel format. And this is where we actually need to use more of to be able to also scale up the ice cream and the tea business. Okay? So all in all, hopefully, I've given you a sense as to what we're doing across some of these channels. So the priorities are really go fast in premium, go e commerce, do more in beauty channels and then also in out of home.
And in so doing, try and get to more cities in the lower tier city areas. So thank you very much. With that, I hand over to Rohit again.
Thank you. So that covers our growth priorities, the 3 growth priorities of core, future fit portfolio and going deep, going digital, going wide. I'll switch a little bit now on the enablers. And our first enablers is a new organization model. And you heard a from Nitin and Alan and the others yesterday on the Grow Power Run model.
Essentially, this is to give you a sense of how it's being deployed in China. So in China, we have the Gro, which is really we have 10 CCBTs or business units. And about roughly half of those have shared omnichannel teams, the other half have dedicated end to end teams. These are really our front end. They're supposed to be absolutely agile, empowered, very, very much close to the market and very close to their consumer and their categories and really being experts at what they do.
This is supported by the power layer, which in our case has got the data and the digital hubs, the marketing services, supply chain, R and D and expertise partners. And at the bottom end, we have got the global application of plan, execute, deliver and collect, which is our integrated operations layer that runs through a global economies of scale rhythm. I want to give you a bit of closer sense of one of the power layers, which is the digital hub. And that's why we invited Fanjoon, my colleague, to talk you through how exactly we are driving data as a new oil in China being so, so important to win. Fanjun?
Kuo Jin Jagama, the founder of Alibaba. Data is new oil. This is particularly true in China because, as you see, China boasts one of the most digitized population in the world and also the most advanced and sophisticated data ecosystem. So to win in China, you have to win in the data game. Unilever has invested heavily in organization, infrastructure, capabilities and partnership in data.
So organization, we launched the digital hub in May of this year. We have fixed and flexible FTEs to about 100 people working in digital hub. On infrastructure, we had invested built very large first party DMP. Up to now, through business transactions and marketing activities, we have already obtained concerns of more than 100,000,000 Chinese consumers whom we can engage on 1 to 1 basis. This gave us unprecedented advantage in understanding and serving Chinese consumers better.
On capabilities, we have built a lot of in house capability including AI, machine learning such as natural language processing, image recognition, etcetera, etcetera. And in the previous video on e commerce, you have already seen that automatic content generation capabilities for e commerce. That was based on our in house capabilities. Last but not least, partnership. Not only we have established strategic partnership with the leading players like Alibaba, Tencent, Jingdong and Beidance.
We also established Unilever Foundry, which is a platform that will connect with hundreds and thousands of technology startups. In the last 2 years, we have worked with more than 60 technology startups to address many different business challenges through new technology. We leverage all these data and digital capabilities throughout end to end business operations from innovation to consumer engagement to the last mile 20 sale consumer conversions. I'm going to give you 3 examples to illustrate how we apply these capabilities. The first one is about faster innovation.
Our digital hub developed machine learning based capabilities. First of all, we use AI, which is natural language processing to process millions of social commerce and e commerce product review data in seconds. And then with this data processed, we apply a machine learning model. If you want to know the detail, it's called cars random forest. We apply this model to actually identify the category growth drivers, whether it's benefit, claims, ingredients that are truly contribute to success of new product launch in that particular categories.
Based on all these insights, then the team can develop innovation ideas, right? In the past, you pull those innovation ideas into consumer test. But now we have AI based tool. You pull this concept into that tool, it will automatically analyze the contents and then predict the chance of the success of that innovation ideas. So in the past, it may take months or weeks to do all this kind of work and now all this can be done in just minutes and hours.
We have been talking about data driven marketing, precision marketing. In China, because of advance in e commerce, so pretty much everybody is doing precision marketing in e commerce. And we are pretty sophisticated across all the manufacturers. And Unilever is as competitive as many of our competitions. But more importantly, to our knowledge, precision marketing at my scale to brands that are reaching 100 of 1000000 consumers at the same time.
That's very rare, few are doing that. Well, Unilever China, we are leading this. So we utilize big data to classify consumers into different segments based on the attributes of life stage, lifestyle and passion points. And then we develop advertising and target those advertising to those consumer segments in the most relevant and resonating way. As Alan said yesterday, relevance is most important.
So this summer, Kornetto launched the precision campaign. What they did is basically segment Chinese young consumers based on their patient points and we identified 3 top patient points. And for each patient point based on consumer insights, with developed a piece of advertising that is really, really resonating with that. So when the result come back, it was hugely successful. So consumer interest to our product as measured by click through rate is 70% higher, seven-zero than the non precision approach.
And starting from the second half this year, all our big brands, which are targeting to 100 of 1000000 consumers, have adopted this approach. Okay. Well, by utilizing our first party data and strategic partnership, we are able to track consumer journey through all the touch points. Not only online touch points, but more importantly in China start to map out their offline touch points. So, Unilever is really leading the way in linking all the touch points and basically deliver different marketing mechanism and messages across different touch points, especially in the offline.
So one channel you probably think will be least likely to be digitized. That is the 3,000,000 grocery smart stores in China. And here again, we are leading the way. In June, we cooperated with Alibaba and did one very successful pilot. We first basically drew distribution of almost laundry liquid into thousands of pilot stores.
And then we utilized location based data to identify consumers who are living around those thousand stores. And when they are watching online videos, they will be able to see our ad on Omo Lungi liquid. But more than that, when they click the ad, they will have a digital coupon in Alipay, which can be redeemed only in the store where we have OMO distribution. So it was very successful. We most importantly, not just in this promotion period, after that period, 3 months later, we still see consumer keep going back purchase Omo Lungi Liquids and the retailer keep placing order on that system.
So you have seen all the applications of data and digital from us. And our digital hub is keep experimenting and scaling up the success. And we are and will continue to be the competitive advantage of Unilever in China. Thank you. I'll pass back to Ricky.
So you heard how data is really a source of scale and source of competitive advantage in China. That brings me to the last two enablers that I touch upon. The first is really savings for growth, and we are contributing to the €2,000,000,000 savings agenda that Graeme talked about through, again, the global programs, disciplined execution of that every year, 5S materials, zero based budgeting and the change program to address the order as opportunities and to create the fuel for growth to reinvest in really our brands to grow the business. The last enabler that I want to touch upon and really on one big point there is in plastics. And in 2019, already 80% of plastics in China are recyclable in our business.
And we will achieve 20% of PCR inclusion, which is well on the way to increasing every year to meet the global targets. And this is really the one single-minded corporate agenda we have is to really excel in the space of plastic reduction that has been announced a few months ago a few weeks ago by Alen. So that the 3 enablers that I talked about was the new organizational model, the future growth and the sustainability agenda. That brings me really to the end. And I just want to quickly walk through what we have done in the last 30, 40 odd minutes.
We've talked to you about really what's happening in the macro economic context of China. We zoomed in into the big consumer themes, mainly digitization, upgradation. We've talked about our own markets and how they continue to grow and that there's immense opportunity that China will continue to be the most exciting story of consumer story in our times. We've talked about how strong we are positioned in China, how deeply and robust infrastructure we have, how deeply we have penetrated our brands and how we position to win in China. We have a very unique employee proposition and a strong place in the Chinese ecosystem.
And we've given you a sense of our strategy, really quite simple, is the core, the future fit portfolio and going digital, going deep, going wide are supported by 3 key enablers. And our track record, the last 9 years is strong, and we continue to be confident that we can keep it like that for the years to come. So that really is our story. It's very Unilever in China for China. Thank you.
We have 5, 6 minutes for questions, I think.
Thank you. I wanted to ask on your go deep approach to target lower tier cities because I think that's something that's quite consistent across all of the international players. And I wondered if you think the competitive pressure will start to intensify as everybody has a very similar strategy to push throughout China and how you think about the margin of your business in that context? And then the second question, I believe you mentioned that ecom is 25% of your business growing at around 30%. And if China as a whole for Unilever is mid single digit, that implies that your offline business is in decline.
So is A, that correct? And B, can you pinpoint which brands or categories are in decline in the offline channel?
So to answer the second question, first, we're growing more like 8% to 9%. And so our offline offline channels are growing The offline channels are growing on account of the going deep and going strategy. So our e route to market is really driving the growth. Our small tier distributors are driving the growth. And really, the kind of the big stores, big is more and more flat, kind of the old legacy channels are more flat.
So on the whole, our offline business is also growing. In fact, this year, we've had the fastest growth in offline for many years in the past. So we are now getting broad based growth, not just in e commerce. But without doubt, e commerce is really what's driving them 80% of that growth. To your question around the LOTUS series, our brands, like I said, have very wide penetration and they have very strong mental availability.
And for us, it's always it's very we have to get more available. And because China is so big that the opportunity to sort of being bought is high if you get just the distribution. So we have big built in brand investments, big awareness base. All we need to do is to get our brands in the right place and we'd be preferred. In fact, to be honest, the Lotte series are less competitive and less costly than the big stores and e commerce because essentially consumers still prefer big brands.
For them, upgradation is going from local brands to big brands. And at this time, big penetration opportunities really exist in the artist series, both for e commerce as well as for offline. And we see that as not we don't see that as a challenge. We see that more as an opportunity to grow. So that's to answer your question of Lotte Suriace.
Thank you. Just a couple of questions. Again, on this kind of deeper penetration, I think you mentioned going to 100 or trying to reach 100 cities. But when all the key platforms already get to 600 or in some of them, 30,000 cities, what why actually develop your own distribution when any way it's offline, which is going to be drive or continue to drive the growth, as you were saying? So in a way, why add cost when you can just use somebody else
to do it for you?
So I'll ask why I think it will also help.
And then the second question is, I think you said about the animal testing ban. Is there anything we don't really yet know exactly precisely what is going to change, but when why haven't you, in a way, found a solution to participate in that very large, very vibrant, prestige market, given you've been doing lots of M and A as a group in that area, to kind of have captured that opportunity earlier? Why has it not been done?
So I'll pick on the first one first, and Raifang can help me supplement to complement that response. So it's more like 600 cities where we want to be and 300 city clusters is where we want to be present. And normally, we found that the growth, the opportunity is really around the big city. So if you're in Beijing and if you put 18 cities around Beijing is really where the opportunity is. So essentially, we are going to deep we're going to strengthen what we already have by expanding around a big city.
And those are the 100 city clusters, roughly 600 cities, half the urban population. To your point about why use one route or the other, China is extremely big. You really have to drive your availability across all channels. And you, of course, have to make choices, but China is so big that we'll always have white spaces, always have opportunity to be bought. And I think we're far away from the notion of saturation.
I mean, I'm talking of years ahead of us. So for us, it's going to be, of course, up to a viable point. If you get to 100, and we keep looking for like to like because that's really a notion of, are we just expanding for the sake of it? Or so like we said, it's close to double digit. That's really a key metric that we look at to make sure that it's really virtuous growth.
And so far as your point about the animal testing, we do already trade in through cross border. Our prestige portfolio is available, Dermalogica, Hourglass, etcetera, have already when we put them up in like the recent China importexport exhibition, we had a prestige stall and really the brands have huge traction. And when but of course, the cross border traffic is 1 7th of the local traffic. So there's always limitation of how much you can grow with that channel. And of course, for instance, with the HCI, we do have a very big business out of Prosper channels.
But we do expect in the times to come, near future, that the animal testing would be liberalized, and we will be able to bring our brands in and participate in this exciting opportunity in the luxury skincare side of the market. Meaning the only solution we have is to use the cross border build brands, which we are working on. So we are ready to sort of
yes. The other option we have is to abandon our principles on animal testing on those brands, which have been extremely purposeful and have 100% committed. In fact, Hourglass is committed to being a fully vegan brand. And so this is an example of holding to our principles and being patient to wait for the barriers to come down, the very artificial barriers to come down. And maybe just to underscore Ruut, one of the things Ruut hinted at, the company that's been working with the Chinese authorities to change the regulations to eliminate the unnecessary animal testing that's forced on imported products, but isn't applied to locally made products is Unilever.
So yes, we probably have taken a couple of years of pain by holding to our principles on that.
We have a strong partnership with the government. We're working together, and we're quite hopeful to see the merit and that there would be an opportunity in the near future.
Can I just circle back on the lowest here? Just one more point. Because I think when you ask the questions about what models do we use, right? What we're trying to do is really just the average China because you get different brand strengths and different market development stages in the different parts of the provinces as well as the cities. So which model we go with depends on where the brand awareness is, how much coverage we already have, how is the brand penetrated.
So then you sort of get a matrix to be able to drive the most efficient and actually the most effective way of covering it. So that's how we're managing the matrix across the 100 CP clusters.
Thank you.
They're over time.
All right.
Thank you. Thank you very much for your attention. Thank you.
Thank you.
So thank Thank you, North American team. Thank you, the China team. Everybody will be around during the break so you can grab them and ask them more questions. So we now have a half hour break. And then afterwards, if everybody could come back here and then we'll give the instructions and get everybody sent off to the different rotations around the building.
So we come back here at 11:15. Thank you.
Okay. I love this is the spirit of the Unilever exec. Nitin is very worried that Hanukkah where's Hanukkah? Hanukkah misread the agenda and booked a flight that's too early. So she's on her way to the airport as we speak.
So you get all the food questions, Nitin. What we're going to do is we've saved an hour, I don't know if we'll need all of it, for questions on anything that you've seen in the last 2 days. We'll take probably if we run to time, we'll take 50 minutes or 45 minutes of that for just an open dialogue now. And then I'll say a few words just to wrap us up, and then we'll be on our way. So with no further ado, let's throw the floor open and see what's on people's minds and what questions we've got.
Yes, sir? Right at the
back. I'll go first.
So two questions. The first one is to Sunny. You've come in from Amazon. Amazon is a key client for you. You've come in with this sort of knowledge and experience.
As you look at Unilever now 4 or 5 months in versus Amazon, how is it different as an organization? Think of all the things we've looked at today in terms of organizational structure, in terms of the HR approach and so forth. I just want to get a sense of this is what's good at Amazon and not here yet or maybe vice versa. And then the second question is to do with the dual listing. This time last year, it was kind of just gone off the table.
You said it was a key focus when the Chairman spoke and so forth. So the question is, just to update us on that, is it off the table? Is it still ongoing? And I guess, to some extent, perhaps more importantly, have you worked out cunning ways of doing what you want to do strategically without actually getting the dual listing done? Have you done is that some of the work is kind of you've worked your way around it rather than just the actual issue itself?
Thank
you. Very good. So reminding my colleagues that we have a worldwide audience dialed in through the webcasting. Please feel free to be as open and transparent as you like on the two questions. First one for Sunny, second one for you, Graham.
Well, mean
to be super transparent in this case. So the question was around what are the big differences between Amazon and Unilever. And I think in summary, it's very simple for me. If you take a look at the 2 halves of a brain, right brain and left brain, Amazon is a very left brain company, Unilever is more right brain. That's probably the quickest summary I could give to you.
Obviously, comparing a tech industry with a CPG industry is a very challenging thing to do. I think the beautiful opportunity that we have is that if we can make Unilever more of a tech company and make it move much faster to meet the needs of consumers, the world will be our oyster. So that's my quick summary on changes and how we can leverage it.
Thanks.
Okay. So on simplification, I think the best way to describe it is that there remains something that's strategically attractive for us, but and we continue to work it. But it's maybe not on the front burner. Just to say what we've done since the events of last year, obviously, we went back and reviewed in detail from the ground up the conundrum, the strategic benefit and all of the options, David, that were available to us and to tackle your sort of dangling little fly on the end of the line at the end of the question. There is no clever solution.
In fact, we went back and looked at some more exotic ways of potentially solving the problem. In fact, we kicked it into a couple of independently smart people within the organization in order to get a fresh eye on it because to be honest, we'd looked at it. This is the 4th time we'd looked at it. And we were a little bit you can get a little bit close to the subject. What was really encouraging was that after that very detailed review, there was no magic solution other than the ones that we were thinking about.
So we'll continue to work it. I think what is clear from the process we went through last year is that obviously the threshold of success comfort that we would have to get is extremely high. And that's a new factor, almost like round 1 affects anything that happens subsequently. And I should say just from some of the discussions we've had over the last couple of days, it's very obvious again that everybody understands exactly what it is we're trying to achieve strategically. Everybody understands the strategic benefits of getting to a single top company, but it just is very, very difficult to see a route to get there from our historic structure.
I would remind everybody on the day to day activity of Unilever, it absolutely makes no difference at all. Small number of people who are very intimately knowledgeable of it, who work on it. It certainly doesn't mean that we can't do many, many things which it doesn't impact at all. So really, for that reason, it doesn't have to be a pressing priority. We've been perfectly fine in this structure for many, many decades, but we do recognize that the strategic benefits are there and we would like to achieve it at some point in time.
Yes.
Two questions again, please. First, referring back to Amanda's presentation. Of the 3 I can't remember the phrase you used, but acute issues, it seems that 2 have been a function of a lack of resources, lack of revenue investment and one's been a function of overpricing. Is that in any way a result of the group imperative for margin growth? And secondly, just following on from David's point, to get it on the record, could you lay out your thoughts on the desirability or not of splitting the business between Food and HPC?
Both for Amanda.
I'm going to tackle the first one of those. So I talked about the 3 acute issues. And let me just maybe do the double click on that because I'm not sure that, that is the right takeout, if I may, in terms of what the situation is. So let's start first with dressings. And I talked about that specifically being a competitive battleground.
Some of you asked me about that at the break, and so I'll give the whole group the same answer. I've been involved in this business for over 10 years, and it has always been a competitive battleground as well. So it's not new. We know how to play the battle. It's a battleground because it really is one of the most attractive center store categories that exists.
It's attractive in terms of stable revenue and also a relatively profitable segment of grocery as well. So look, we have these skirmishes from time to time. And this is one where, yes, we needed to dial up the intensity of the competitiveness that we had. But I don't think that you should see that in any shape or form as that was because we were beholden to a certain margin target because I can tell you that I played this game many, many times before we had set that target out as well. So that's the first one.
I think the second one on ice cream, I would nuance it differently. That was again not about a margin target, but I think you would expect us that when we have material inflation impacting our business that we would find a way to recover that through pricing. And I don't think that it's abnormal that when that happens that, that will affect what the phasing of your promotional activity and what your consumer uptake in that very narrow immediate period is going to be. And then the third one on hair, and I know a lot of you have asked me more questions about it. No, I think it is quite complex.
And I don't think that you can pin that down to operating margin. I'm had it. But if I'm really truthful about it, it is what I said that we've had at the heart of it a couple of years where our innovation has not been firing on all cylinders. That's around a suave, amazing brand. It's the brand that's in 1 and 2 households in America.
If it gives you a degree of confidence in the brand health, the personal wash side of that business is actually pretty robust at the moment. But it's a brand that more recently was built on us being able to bring innovations like argan oil into hair care, but to be able to offer that at a more democratic price point. So let's take it around the $3 mark. And it's a bit of time since we have had something that's had that kind of impact and grip in the marketplace. And then that does result in what then the points of distribution are, etcetera, if you're not building that innovation pressure behind a brand.
And then similarly, as we tried to tier the TRESemme brand, that did not land in market in quite the way that I think that we had intended or hoped. So again, I don't think that, that is an underlying margin drive issue. I think it's something else. I think it's something that we're working really, really hard at. And as I said, that's around how we flexed our plans for the remaining part of the year that hopefully see it's how we've thought about our innovation for next year.
And frankly, we'll continue to drive that through next year and the year after. So I think my headline on it or what I would hope that you would take out of it is that this is a work in progress on here. So 3 acute issues, but I think really quite different and quite root causes as well. So there's probably somebody else that should answer. Yes,
your second question, was that about globally or at North America level? No. Okay. The perennial question. So let me answer it the following way.
And just to recap, the question was, are HPC and food still seen as being bedmates into the future? I think the easiest way to think about it is using the grow, power, run framework that both Nitin and I talked about, which Graeme touched on. And so from as a refresher, in case everyone didn't kind of capture it, grow is really the dedicated sales and marketing focused part of a business. Deep expertise and capability, things like our digital hubs. And Run is the operational backbone of the business.
And I think I was quite explicit that we see opportunity to be more differentiated on the growth side of it. So I do think that some of the characteristics of Foods and Refreshment as differentiated from Beauty and Personal Care, as differentiated from Home Care, and I definitely would not lump Home Care and BPC together, will require greater separation. And some markets around the world are enjoying better performance as of each division by, for example, fully exploiting the CCBTs, the category country business teams, by even separating our route to market organizations by having dedicated sales forces. So the answer is I think we'll see more focus between BPC, Home Care and F and R in the grow part of the business. In the power capability, that's partly to do with the margin structures of the business.
BPC can afford and needs high levels of investment in capabilities like a digital hub given the importance of investment in marketing in the BBC business. Home Care and F and R, frankly, can't afford the same level of power infrastructure and expertise support. And then all three, this is the real value of Unilever is where all three businesses come together and we extract efficiencies in the run part of the organization by running them at absolute highest efficiency, lowest cost. It's not an easy thing to say, but replacing expensive people with inexpensive robotic processes. And so that's the answer.
And then you can conclude from that that we see continuing efficiencies and value in running the businesses together, particularly on that run part of the model. Sorry, I'm looking at Celine. Then Alan?
Yes. You mentioned that you are not happy with your growth rate, and you have laid out a few several initiatives to accelerate that. Now it has been, I think, 2, 3 years that we are in the low 3 level. How long does it take we have to wait for to see the fruits of your changes? And do we need to wait for you to do disposals to really kick start the growth momentum?
Yes. Well, the Zurich Axioms is a great little book, which was written by a bunch of Swiss bankers straight after the 2nd World War, and it was 14 rules to guide your investing behavior. I'd encourage you all to have a look at it. It's just a very short read. But they then realized that they were good 14 rules for life as well.
And one of the axioms, one of the sayings is distrust anyone who claims to be able to predict the future, however dimly. And so the answer to your two questions is I'm not saying and no. Alan?
Yes.
I think Celine's a little feels a little shortchanged
on that one.
Of course, we want to see a step up. And I'm going to say a few words in my closing remarks that will give you an indication of the kind of time frames that we are thinking on to see a step up. We profoundly believe that there's trapped growth in the business we have today, And we have a very good sense of why we're operating in that 3% to 4% range and not higher. And I'll make some comments that will give you a sense of what the time frame might be for us to get that ramping up. And the second half of your question is you absolutely should not have to wait until we've executed disposals for us to be able to step up our growth.
The business that we have today has got lots and lots of trapped potential in it. Sorry for being a little abrupt earlier on. Alan?
Yes. My question is for you, Alan. So I think if I understood your remarks yesterday that you felt never could be doing better on innovation. And I just wanted to maybe get a bit more granularity on that. I mean, where do you think the gap needs to be closed?
I mean, is it about not having enough stuff in the pipeline? And just an observation, I mean, without in any way wanting to diminish the importance of purpose led brands, I mean, we haven't heard a lot these 2 days about big innovation with superior performance or unique consumer insight that's going to land on big brands and move the needle. So is it a case that you've been disappointed with the stuff that's in the pipeline? Is it to do with, as Amanda alluded to, some misfiring of innovation? Is it to do with execution?
What needs to be done to improve that innovation?
So the actions that we are taking to step up our innovation output, I think will give you a sense of what the problems are that we're addressing and how long it might take for that to start to flow through. So the first thing is, remember, Unilever's model. If you took controls off of Unilever, everything would default to the country access. We're very proud of our long local histories and markets. And I think during C4G, we allowed the pendulum on innovation to swing too far to local, and we generated lots and lots and lots of well intentioned but necessarily small local projects.
What we're in the process of doing right now, we're well down the path of doing, is being much clearer category by category what is the innovation strategy, what is the innovation strategy for deodorants, where do we want to have our biggest innovation successes? And we're doing that for each category. So the first is to be clear to Richard and his teams and the marketing teams, where's the focus for innovation? Second thing is and it's very related is sheer product superiority is a very, very strong predictor of superior growth. And at the moment, the data is that of the products that we test blind versus our their nearest appropriate competition, about 55% test has been superior, about 42%, 43% test at parity and 2% or 3% are inferior.
So that sounds pretty good. The issue is that we're testing insufficient amounts of our portfolio head to head, that we have set briefs over the last 3 or 4 years where not frequently enough are we setting superiority as the action standard And on a balance of being prepared to invest for superior products versus take a lower cost product that delivers parity, we've been more on the latter than the former. All of that is going to change. We're going to test more. We're going to set a goal of superiority.
I'm going to be prepared to invest in the products that deliver that. And then finally, we are getting much more top down on identifying the global priority big hit innovation. Maybe Sunny you could give some examples from BPC and be open the type of projects that for next year we're going to say these are the big ones that we want to see run everywhere. We've not actually done that historically. We've allowed our innovation program to be a little bit too much bottom up, and we're going to shift to a much more top down.
And just before Sunny opens up now, I'll give you the last word, Richard, on kind of innovation. It's your thing. We have a very good pipeline of activity for the coming year and the year after. So I think this is more about how we manage our innovation than any lack of inventiveness or capability itself. Sunny?
Yes. So can you hear me? Yes. So thank you, Alan. Alan.
Yesterday in my remarks, I was keeping things at a very high level and I was getting some feedback around, can you be a little bit more specific. So I'll be a little bit more specific here. But when I think about BPC in general, what I'm seeing across our 5 categories is that there is potential to have what I call ideas with impact. And ideas with impact are essentially leveraging the scale of the $21,000,000,000 business unit that we have. You can drive big ideas on tiny things, but you're not going to get the leverage on the entire portfolio.
One of the things that we're going to be looking to do in BPC going forward is getting impact across the entire portfolio. So we've got innovations like Dove. We've got a Dove launch coming next year that's going to cut across multiple categories. And we think it's going to be a nice big one and consumers in our testing absolutely love it so far. Inside the Dios category, I shared Rexona Clinical Protection.
That's a fantastic product. It's a fantastic product. If you haven't tried it, you should try it. It's going to be another one that has ideas with impact and we're going to launch the technology across multiple brands and forms. We've got ideas with impact like Love, Beauty and Planet, which is a new brand.
It's not going to be very big, but I mentioned yesterday that it's going to be in 30 markets, $100,000,000 in turnover by the end of this year and it's going to continue growing at a rapid pace. That's another idea. That's an idea with impact because it's going to cut across multiple categories in BPC and get us scale. So those are just a few details of what we're going to do, but there's plenty more.
Raj, do you want to add anything?
Well, I'll be brief because I think you've really nailed it, Alan. I think I can just say a bit of perspective coming in. I've seen lots of companies, R and D departments worked in lots of funnels, lots of pipelines. And you never quite know when you come into an organization what strength you're going to see, how much fixing is needed, how follow the cupboards, how bare the cupboards. And I can honestly say, and Unilever, I endorse what's been said.
I think we've got fantastic capability in R and D and the marketing teams and actually a ton of great stuff in the cupboard. And if there's one thing I was going to just endorse, it's to say, let's get the real gems in those that can be scaled, as Sunny said and Alain said, and really support and drive those a bit less democratically and keep the speed and agility that we've enjoyed as well. And that's the sweet spot we're going to be going. We're doing a ton of other things about how we innovate and how we speed and how we get other ideas through. But that's the shorter term impact and there's a lot of good stuff in the cupboard even for 2020 2021 as Alan said.
Peter, can you do, as Sunny did and just highlight to the extent you can in the context that we're in, what are your ideas with impact for 2020?
We as I explained yesterday, the laundry game is basically upgrading people from bars to powders to powders to liquids, from liquids to unit dose. Unit dose is clearly a big bet for us and going really well in many markets where we are. Then I talked about green cleaning. Across our household cleaning portfolio, we have unbelievable green cleaning innovations, which we are driving in multiple markets. We have a fantastic program for professionals, which we are driving in many markets.
And yes, the Home Care performance has been really decent over the last couple of years, partly that's driven because our innovation also did well. And it looks easy taking 7 Gen to 30 markets. It's hard work. You have lots of learning, but we drive that very, very aggressively. The launderers, I just got a note in from Frank, who's the Chinese guy.
We launched The Laundress this year, I think, 3 months after acquisition in China. We had a big hit during Singles Day. So things go quickly. The sort of all slow, slow Unilever is really gone.
And I think let's Judge just next year ask the question. Obviously, we're being a little bit cagey about exactly what we're going to do in the next 12 months. But you've heard breakthrough technology on deodorants that we run across the portfolio. You've heard the next big thing on dull skin cleansing is coming. You've heard some ambition on our prestige portfolio.
You've heard Love, Beauty and Home and Planet. You've heard Unit Dose from Peter. You've heard green cleaning from Peter. And if Hanneke was here, she'd be talking about vegetarian butcher and plant based in more general across NOR. Let's take a look at those 8 or 9 things this time next year and see what's been their aggregate impact on the business, we can really get behind those, and those will give us a big oomph on our innovation activity.
Okay. Right. I'm can't Jeremy.
So it's a question So it's a question for Alan. Previously, you've spoken about how you have this sort of lack of belief in the like the hierarchical organization. You talk about, let's say, agile squads of people moving to work on the products which will deliver the highest value at a given point in time. So when you look at the organization state, you still got sort of the performance units, the countries, the categories. How close is the organizational structure to how you would want it to be at the moment?
And what are the changes that you hope to make over time?
In my democratic approach, I ought to redirect that question to Lena. But let me just say the following, and apologies to 1 third of the group who heard more or less the same rant when Lena was presenting in the breakout. Our organization if you think of Unilever's organization today, we probably would think in terms of boxes and lines, a pyramid with a box for the BOSS and then a spanner control and some more boxes and underneath some more boxes. That's a 100 year old model. It was invented by the military.
Maybe it's a 1000 year old model invented by the Romans, 2000 year old. It is intrinsically hierarchical. It's intrinsically inflexible, and it's not fit for purpose in the modern world. And so we see a future where we are much less inhibited by fixed organizing organization structures or ridiculous labels that put people's position in a hierarchy on them. And rather, talent will flow to the areas of highest opportunity, the projects and the business opportunities that will yield the highest return.
And work instead of working on 25 things simultaneously, they'll work with intensity on the thing that has got the highest value in the short term. And that what I've just described is the methodology that's called agile working. And at the moment, we have agile working really up and running in, I'm going to say, 10% or 15% of Unilever, maybe a little less actually because it's not end to end in North America. So it might be high single digits of Unilever. And I do see a day when fully a third of Unilever works entirely in agile methodologies.
A third is in a blend of agile and fixed. And frankly, I don't want us flowing someone to work in the controllers department. I want the controllers department to be locked down and deeply expert in that space. And so that will not be an agile part of the organization. Actually, maybe I've given the wrong example, but there will be parts of Unilever where locking people into deep skills that they have is and a more fixed organization is the right thing to do.
So I think we're only a very small way down the journey of changing our org structure to something that's much more future fit. In terms of culture, we've been quite explicit about what we're trying to achieve in culture, which is preserve the amazing values that we have around being a human company and being a purposeful company, but add in a little bit harder edge around a greater sense of accountability. And again, apologies to the group who heard this before, but and I don't generally like drawing on military metaphors, but the U. S. Marine Corps have got a wonderful expression, which is assume command until it's taken away from you.
And that's a little bit the MO I want to see more of in Unilever, which is the wonderful fantastic people that we've got up and down the organization, taking things and running in a very empowered way. And we've got a culture where it's quite hard to get fired in Unilever. There's really one sure way to get fired in our company, which is to break our code of business conduct, then you're out the door. But our appetite for forgiveness when people try suddenly make a valiant effort and it doesn't work out is quite high. And we need to preserve that so that people feel free to experiment and run with things that they feel passionate about and that are aligned to strategy.
So a little bit longer of an answer than I would normally give, but I think we're partially down the road on the organization of the future, and we know exactly the direction of travel and the culture of the future. Lena?
No, I think that was great. You did a good job.
Thank you
very much. We're also trying to provide a culture of more immediate feedback in the moment. We are, that's true. And I can tell you on this sofa set of sofas, Lena has absolutely no trouble telling her Chief Exec when he's not doing a good job. So it's quite nice to hear a slightly positive word for a change, Lena.
Thank you. Yes, Martin?
Thanks. I think I know the answer to this, but can we just fill a record? Is the margin target still in place? You said in Mumbai it was. You said it was in the summer.
I didn't quite hear it or see it on a piece of paper. So I'm
sorry, I've got my own voice, and
I know what he's going to say anyway. So Graham, fire away on that one.
Yes, it is. Very much is. And Alan has that piece of paper coming up.
Where 20% defined as anything between 20.4% 19.6%.
Yes.
I've always seen Unilever as a friendly company. When things are not quite as good as you want, you kind of all team together and let's sort this out. In a way, I'd
have to work for you, Nneva.
But has it for me, Nitin, you're the right person for this. Have things changed around the management table? There are more external faces which are joining all the time. Is it as collegiate and as friendly? Or are there little things that are changing to make it, I think Richard used the word, slightly less democratic?
So I'll answer it in 2 ways. I think if the question is, do we get along well with each other, do we have a good time with each other, the answer is yes. But the real test of good relationships is also the ability to have the real conversations and the hard conversations, the ability to disagree with each other without having to be disagreeable. And I think this team is, I believe, much, much better than we've been in terms of being able to get along with each other, disagree without having to be disagreeable. And that's an important requirement of any team.
Anyone else want to comment on Harald's question? It's a profound question. Or maybe even more broadly about the organization. Peter?
I think what Alan has brought us is much more space for having real discussions in the group. And I'm in business because I enjoy doing business. I like growing. I like making money. Purpose is very important, but I also like the first two.
And having tough discussions with each other, I think, is a really good thing and I think Alan allows it to have real discussion in our executive team meeting, and they are sharp at time. And they're not always pleasant, but on the issue and not on the person.
And the
other thing
I wanted to build on it was you have to work at it. It doesn't happen automatically. And I think again, again, under Alan's leadership, we've spent time together. We have a team coach, believe it or not, who tells us feedback in the moment of how we got the outcome we wanted or not. So you have to work on it.
You have to put the strength of the team together and work on it.
Only thing I would build just being the new guy on the team is, we do have disagreements. And I've seen teams, been on teams where the disagreements, you walk out of the room and you just continue to disagree and you don't make a decision, you never move on. We have a great relationship here where we disagree and then we commit and we act as if that decision is our own. And I think that's a beautiful quality and if we continue to do that, it will serve us very well.
I thought you said your old question though. I've got one more
for Q1. I wanted to ask about growth from a country lens because we've so far focused on strategies behind growth, such as digital innovation, purpose.
But if we think
a step below that and maybe by country, which geographies are going to accelerate growth in the next 2 years? Because from the regional presentations, it sounds like North America, Brazil still have some challenges. China is already doing very well. So just interested to get your feedback on that sort of second derivative, which countries are you hoping to accelerate?
Let me answer the question in terms of where will most of our growth come from, which is different from which countries are going to accelerate because several could accelerate from relatively low levels. But the biggest impact on our growth is going to come from parts of Asia. If you take South Asia, if you take China, these are likely to contribute to a substantial part of our incremental growth as we move forward. Both are large businesses, both economies are growing slightly slower than what they had in the past. We've got strong businesses there, which we feel good and confident about that they will power growth and will be the most sizable contributors to our growth over the next 3, 4 years.
I also want to call out the next wave of rapid growth emerging markets, where I think you if you were able to decompose our forward projections, I think you'd be quite surprised at just how important Bangladesh, Pakistan, Myanmar and Ethiopia are going to be. There's absolute euros of growth going to come out of those four markets and a few others, which I'll stop there which would look very attractive.
Yes?
Just a question, I think, for Graham, but just about CapEx. I think you showed the chart where a number of years ago it was about 2.4 that represented a level of underinvestment that you weren't comfortable with, caught up to 4.2 percent. And then today, I thought you said it was going to round to about 2.5 percent for the year. What's the difference between 2.4 percent a number of years ago and 2.5 percent today that those can be sort of this one can be right, that one can be wrong. So that's part 1.
The second part is just as you think about 3P and other methods of outsourcing, what are the unintended consequences of that, particularly across the industry, right? A lot of people are doing that. Does that enable 3rd party, which lowers the barriers to entry elsewhere? If the willingness to put that capital in place, if it means protecting something that you don't want a third party to offer to somebody else? So those 2 please on CapEx.
So I guess the first thing as you probably have said this in the presentation yesterday, At the end of the day, about 2.5 percent, 2.8 percent is just our level of CapEx. It's a very manageable level for our business. And if we it's a very easy discussion for us. If we see a growth opportunity that requires CapEx, we very rarely have an anxious discussion about spending that money. It's an easy decision.
To your point about the 2.5 percent, 2.8 percent, whatever, looking like the 2.4 percent, I think you need to appreciate that the world is radically different between those two states. And we were underinvested over multiple years. I think the best example actually is where has a lot of our capital actually gone in the course of the last 5 or 6 years, actually right here in North America. North America was a tremendous recipient of both restructuring investment investment for over the last several years. That was still in catch up mode.
I mean, I think, Amanda, about the tea business in North America, I mean, we literally were making Lipton tea bags with machines that were 80 years old. I mean, unfortunately, a museum didn't want to take them off our hands, but the investment that was made in there was a true catch up investment. And the world has changed. I mean, you're on the right point. I mean, this ability to secure manufacturing
of a
very high quality through third parties is the unlock to everything. Almost every one of the businesses we bought does not have its own supply chain. Mark in his presentation yesterday I think was very clear on the impact that technology can have. But does it lower barriers to entry? Well, yes, in a way, I guess.
But I think something that Rohit touched on in his presentation in China, if you want to see the real impact of high velocity, tech enabled, 3rd party enabled launch. You look in China and the 2 categories that he mentioned where you get 200 new entrants in the category in a single year. But he also said at the end of that, don't worry too much, Most of the 200 disappear 2 or 3 years later. And the way to think about it is there's a new competitor in any one of the markets in which we operate, which is and it's not a very elegant term, but there's a bee swarm of local competition that now occupy that particular space. Very, very few of them, if any, move on to become a viable competitor to somebody that has the sort of relative market share positions that we enjoy there.
So it's a different world. It's all the things we've been talking about. I mean, radically different, and that extends into how we think about capital in the company.
We've heard a lot about, obviously, brands with purpose and the importance of that over the last couple of days in accelerating organic growth. Are there any sort of parts of like categories or brands which, Alan, you sort of stretch ahead and think, I'm not sure how we're going to apply purpose here to really make a difference.
Just when you think there will be some brands that can never find an issue in society or a planetary issue where they can be relevant, you get surprised. So I was always wondering, will Hellmann's ever really be able to find something important in society or the planet? Turns out food waste is a huge issue. It's even specifically referenced in the STGs. And as Hellmann puts its efforts against helping to tackle food waste, it's a very natural fit with the product.
And it is tackling something that people are aware of. Throwing away perfectly good food is becoming a social taboo. And we've started actually in Latin America and Canada doing some very good work on almonds on tackling food waste. I think there will be a couple of brands here or there where we I don't want to name them right now because it's unfair on the teams. They're really working hard.
What I will say does not work is forcing the pace. If we set a deadline that says by March, we want all brands to be very clear on the purpose that they're going to stand for. What we would end up with in February March is a series of trivial or fake associations between a brand and something that matches in society. So we're going to give our brands quite a bit more time to see if they can find something important to campaign on and stand for. And I categorically, I don't think there's a category in the business where we will struggle.
I mean, the one that you might say is, can ice cream ever be purposeful? Duh, Ben and Jerry's. So I really think there's not a category where we would say that category is incapable of being a carrier for purpose. But I think as we do our review of are there businesses in the portfolio where they might be better owned by someone else, the primary lens will be long term growth momentum. But the secondary lens will be, are we making progress on making this a more purposeful business?
Yes. So one second. Peter wanted to add something.
Sorry.
Just two questions from me. One follow-up on organizational structure. I suppose matrix is something that a lot of us associate with comfort, lack of accountability and bureaucracy. We saw Procter and Gamble move away from it last year. We've seen Nestle repeatedly commit to it.
I know you talked about agile working in terms of the methodology, but love to hear your thoughts on Matrix. That's the first question. And then secondly, you've only touched on Horlicks briefly. I know it's a deal that was announced at the end of last year, and you're hoping to close early next year. But maybe you could give us a little update on that one because I know you're quite excited about it.
A quick word on Matrix, and I'm sort of open to the team. We definitely don't want siloed organizations where we have a dominant axis. And so in that regard, yes, we do believe in the matrix going forward, but that has to be complemented by extreme clarity on decision rights. So I do not want every brand manager around the world in every country around the world having a point of view on Dove's purpose. But that would be the default.
That would be the default. Similarly, I don't want the global category teams pestering the markets on pricing and distribution levels in a given month. That would be wholly inappropriate. It's not their decision. So the very short answer is yes, we're committed to metrics, but we're even more committed to extreme clarity on decision rights for with consequences for people who don't get the program on those decision rights, that's the approach we're taking.
You want to say anything else?
Yes. I can say something. But in the discussions over the last couple of days, not everybody realizes how flat Unilever is as an organization. I'm the Head of Home Care. I have 30 direct reports.
It's a little bit helped, but it works. And actually, all the Home Care leaders in 70% of the turnover directly report to me. So it's very fast. Yes, it's a matrix because they also sit in a country, but it's actually a very lean, simple structure.
Quickly on Horlicks, I mean, thanks for raising it because we were so excited last year sitting in India and we announced the Horlicks transaction and yet it naturally has such a long closure process that has been a year, you're right, since I just want to say we are still super, super excited about it. And as I said yesterday, it's the 2nd biggest transaction we've done since best, but when you look at a growth basis for a tremendously complicated multiple countries. What's been happening? There's an awful lot of collaboration between both teams, first of all, and that's good constructive collaboration. There's a lot that has to be gone through from a regulatory perspective in India.
That's going okay. That even goes through court processes, etcetera. So it's complicated because of the particular structure of the deal itself. But one of the members of the team who's missing today because we need them to sell more stuff as we close the year is Sanjeev Mehta. But one of the great business leaders in Unilever and very experienced person and he and the team in Hindustan Unilever are absolutely laser focused on making sure that that Horlicks acquisition closes just as soon as we can, and we get all the benefits of that very quickly.
Ritva, do you want to add anything on the Horlicks processes squarely in your billy wick?
Right. Happy to. So indeed, India, it is a very regulated environment. And 3 separate approvals are required from different authorities and courts. And the process is moving.
And so we are optimistic that we'll be able to close the transaction relatively soon.
I think maybe one more question.
Yes?
Could you talk you've talked a lot about other regions. A bit more on Africa. You mentioned Ethiopia as a potential growth market. We learned that you're not too afraid to invest in a crisis. So is this time to put more down in Nigeria?
And then just a quick follow on. In terms of CapEx, you've talked about stable level. Is R and D at the current level,
the level you need? Or do
you need to pick that up to support more science led innovations?
Thank you.
You want to crack at Africa?
Yes, sure. A significant long term opportunity, but also a place where we need to get a few things right to start succeeding in Africa. The fact that Africa will start contributing to a lot of growth just based on the demographics, the increasing the population out there, the affluence that will step in over a period of time is clear to everyone. And yet, I think it's a place where we need to build structural capability. Talent becomes a big agenda for us and we are investing ahead of the curve in many of the markets.
So if you see the investment that we are making in people and capability in Africa, local talent, getting an opportunity to work in other places, go back into Africa with that experience. So a lot of investment which we are making out there. It is like many other markets, a difficult place to do business. There are ups and downs. There are cycles.
Nigeria, we all recognize as a big opportunity, but it's also a difficult market. But we in Unilever have recognized that if you are to win long term in these emerging markets, you have to stay the course and you have to stay committed to it, and that's what we are doing. In Ethiopia, which is relatively new, we are seeing very good progress and is one of the new markets that we've got, which we feel very positively about and will be one of the key drivers of the next 5, 10 years going forward. But we are well invested in Africa and will continue to be so.
Can I just add one thing that the sharp eyed amongst you might have noticed that we made a disclosure in Ghana about a bump within within Organa business that was filed on the Ghanaian Stock Exchange? But that's a constant reminder in Africa that you have to think broadly around the long term and there will still be bumps in Africa. I think every player in the space, we all got excited. I remember when Alan was sent in to run it, we had our own excitement moment called Lift Africa a few years ago. I think we talked to a few of you about it at the time.
But it's there's a constant reminder in Africa.
Africa turned out to be a bit heavier than
we had expected. It's a bit heavier
to lift, yes. And we've had a few of those bumps. And so the year we'll continue to have speed bumps along the way in Africa. On R and D, I'm going to take the risk of an unwanted budgetary request and ask Richard to pick up
the question on sufficiency of funding. There's a handover and a warning in that, which is nice. So no, the honest answer is sorry for taking a hard look at all aspects of R and D coming in as you'd expect. I think we've got good sufficiency in our R and D spend. I think there's a couple of reasons.
So one is the scale we have given the size of the business. So we get a lot of efficiency through that for our fixed costs, our sites, etcetera. The second thing, which I don't think has been talked about too much and maybe we'll have a chance in a future meeting. There's a ton of digitalization going on in R and D. You saw some of the supply stuff from Marc.
But a lot of what we do on the more routine work, we're actually using digital models, stopping a lot of routine technical testing, getting predictive about the work we do and actually drive incredible efficiencies and costs out doing that, while still delivering the same output. And the other thing is we've got great partnership programs with suppliers and others. So we got a lot of tap into our partnership R and D departments and other partners around the world. So we get a lot of bang for the buck for the R and D here. And the other thing I think is if we had a big opportunity that we really thought was worth investing in, I think we've got the environment and the team where we would talk about that and we would put that investment in.
I understand why you might ask the question because you can't really benchmark Unilever's R and D spend against any other company. So what we've done is we've looked at what do we spend on BPC and compare that with other BPC companies, digital for home care, digital for F and R. And it's quite differentiated within Unilever, appropriately so when you do that benchmarking. When you add it all together, it's in the right parish. And if we thought we could get more growth by a little bit more investment, we would do it in a heartbeat.
I wanted to just use one final story, and then I'll wrap up. Some of you one of the nice things for us about coming to these events is we learned something, too. So I learned something about the Ice Queen Now plans for North America yesterday. And the team downstairs who are working on the delivery of ice cream, e commerce delivery of ice cream said, we think this can be $100,000,000 business next year, but we would need $10,000,000 of CapEx on cabinets. I said, send me the proposal tomorrow.
We would never, ever constrain operate we would never constrain growth through operating CapEx. It's not a constraint we should have on our business. Okay. On that, let me bring us to please stay. It's very reassuring for me.
I've had a choking attack in the questions and a panic attack because I couldn't find my glasses, which are always on my head or in my pocket, and I realized they're on the podium. So this is really good news. Let me start with a couple of thank yous. Normally, I put the thank yous at the end, but let's innovate. Well, we had 2 Chairman with us yesterday.
And in absentia, let me once again thank Marijn for being really a good partner and a good chair, but also thank Niels who is engaging rapidly and I think will bring a new twist to the role of Chair and one that I feel we're going to enjoy. He's a really engaging experienced leader. I do want to not miss the opportunity to thank Richard and all the IR team who I think do a fantastic job preparing for and hosting these events. Well done. Thank you very much indeed, Tim.
Has anyone hurt themselves? Any physical injury? I'm sure there's been some emotional injury, but I don't think we have any physical injury. We've been well fed and looked after in honestly quite a nice setting to these types of events. So Amanda, to you and your North American team, to the team, thanks very much for hosting us, everybody.
To my ULE colleagues who I see a lot of, but also to the teams who have come in from around the world, including some close to home, Joostein, I think you guys did a fantastic job. I'm very proud of what you're able to show your businesses. So thanks to all the presenters. Don't clap. And most of course is almost everyone here has made a long trip to be here.
Time is your most precious resource and we really, really appreciate this opportunity to engage. I wish we could do this for a lot. The more time we spend together, the better you understand our business. It's only good for us. And I hope you get a sense that our teams were rushing to engage with you.
We really want to share this business that we're so proud of with you, our guests. So now you can give yourselves a round of applause for committing the time and coming and joining us. Thank you very much indeed. Let me try and just recap quickly a little bit of content. So yesterday, you got CEO, COO and a particularly fine CFO overview of how we're thinking about strategy, operational excellence, capital allocation, value creation.
You heard from all the divisional presidents and today from Richard a bit about how our divisional strategies and R and D strategies dovetail into the overall picture and how Nitin's team are going to bring those to life in the market. I think more than ever, we've shown over the last 2 days how purpose led future fit is not a strap line. It's not the CEO's line. It's a mindset that pervades our whole business being driven by purpose, but being alert to the changes that are happening in the world and how we need to change Unilever to be a future fit business. Today was a proud day for me.
I thought the spotlight that we shone on our China business, on our North American business and particularly e commerce and both of them, Hearing Fernando talk with such authority about how you manage a basket case continent like South America with real knowledge and skill and insight, Is that a problem seeing basket case continent? I withdraw that comment, a wonderful valued continent like Latin America. You heard Lina talk about our people agenda where we are honestly, we're leading the pack on so many metrics, and we're very proud of it. At the end of the day, all we really have are our brands and our people. That's what you're investing in, in Unilever is our brands and our people.
And I think the overall headline is that Unilever is performing well. In fact and here's the slide that Graeme referred to, we're very much on track to deliver the commitments that we gave in 2017. It was only 2.5 years ago. And if you look just kind of look down the column of commitments and where we find ourselves halfway through 2019. It's kind of more or less greens across the board, with one exception, which is top line growth, which is in amber.
And it's not where we want it to be. But it's amber, not red because in reality, we're 70 or maybe 100 basis points away from a very clean and good green report card top to bottom. And in getting there, we're managing against the usual headwinds and tailwinds of a big geographically and category diversified business. And we've talked about some of the favorable forces, the tailwinds. We talked about our e commerce business growing 30%.
We talked about prestige likely to grow double digits again this year. I'm glad that Rohit clarified the perceptions of how quickly we're in China. It's not mid single digits. It's high single digits. And China has become a predictable deliverer of high quality hard currency growth for Unilever.
And there's many things we didn't talk about. We didn't talk about above 10% growth in Fabric Solutions India, Fabric Solutions Brazil, Fabric Solutions China. We didn't talk about our ice cream business in Turkey growing 20%. We didn't talk about skincare in India and China both growing double digits. Many things going right, but I think at the moment, we've got an unusually high number of hotspots.
So Amanda has talked about some of the issues in North America, very much back on track on dressings and mass ice cream. And we don't want to sound overconfident on here in North America. It's a big important sell. We will not shy away from the investment and innovation that's required to get that back on track. Black tea in the developed world is off trend and we have a big black tea developed world business that we're working on, how do we turn that around.
But that's a long term trend. It's not a quick fix to get people drinking PG tips again. But we haven't talked very much about skin cleansing in India where we've lost a bit of penetration recently and we've taken action now to upgrade the product quality. We're back in a superior formulations in skin cleansing in India. We haven't really talked much about here in China also facing very tough competitive headwinds.
Just as South slowdown in West Africa, chronic slowdown in sorry, an acute slowdown in Ghana, but a little bit of a chronic slowdown in the rest of West Africa, including the big market in Nigeria. And we haven't really touched at all on Germany, which has been a drag on for some time on our business. These are big cells in big markets. So Celine is not an immediate turnaround, but we know exactly what the problem is and we know what the solutions are and we're working on them with laser focus. And when we do, we are confident, I'm very confident that we'll close that 70 to 100 basis points 70 to 100 basis points gap on the top row of this matrix and be back with a performance where it deserves to be.
You know what we're going to do about that. We're going to leverage the portfolio. We're going to leverage our geographical footprint. We're going to leverage into faster growing channels. We're going to put purpose end to end throughout our organization.
It is the fuse for our brands. It is the inspiration for our people. But we're going to turn up the dial and the joy and the fun on innovation. We've got lots of innovations that if we did them in our normal way, they would be small to medium sized innovation. But by applying the approaches that we've just discussed now, we'll be able to make them from medium sized innovation to big hit innovation.
Watch this space on the specific projects that we mentioned from the sofa. And we'll have a no compromise approach on product superiority. There will be no margin constraint on winning products. We will have winning products in a higher proportion, a measured higher proportion of our portfolio. And we will be setting the pace on what it means to be an excellent marketing organization with creativity at the heart of our brands.
And all that fueled by continuous savings delivery in excess of €2,000,000,000 a year. You know our model. It's a long term model. It's driven by the extraordinary power of compounding and investment in the levers of growth. We need the fuel to make those investments.
When we do all of this, we will realize our vision of being the global leader in sustainable business. We will ensure that Unilever enjoys the full valuation that we deserve. We're working flat out to deliver it. And one thing that we talk about a lot, but that we somehow have managed not to mention in the last 2 days is the three things that this team and I want Unilever to be famous for, which is, 1st and foremost, the stable of purposeful brands that is the envy of the world, the envy of every branded company in the world. Secondly, a culture and an organization that is setting the pace on what the future of work in a fast changing world looks like and thirdly, proving unambiguously the case that sustainable and responsible business drives superior financial returns.
Those are the three things that this team and I want Unilever to be famous for. Thanks for your support. Thanks very much for your time. Thank you for your continuing commitment. Be safe.
Travel well and we'll see you all soon. Thanks very much.