Thinking digital to widen firm's reach

The secret formula for success at global consumer goods giant Kimberly-Clark is simple when it's all said and done - offer quality products that improve consumers' lives.

But meeting this basic challenge is nowhere near enough for Mr Achal Agarwal, Asia-Pacific president of the firm behind household brands such as Huggies, Kotex and Kleenex.

The consumer industry veteran knows that new battles for growth and market share are fought online.

"We are doing plenty of things that are completely new compared with just two, three years ago. We are selling a lot more through e-commerce, using our digital experience learnt in China and South Korea, where e-commerce is at the forefront of consumer markets," Mr Agarwal told The Straits Times.

"The quality of our products has to keep improving, so that a consumer, say, a mother, can enjoy her time with her baby because he's comfortable and not crying all the time".

That will continue to award us market share.

"But these brand messages and user experience are no longer limited to TV or billboard advertisements. Consumers are having conversations online about our products all the time, so it's important that our sales strategies and investments are directed towards digital capabilities that can allow us to have that constant engagement."

Such thinking led Mr Agarwal to launch the firm's third digital innovation laboratory last May in Singapore - after Chicago and Tel Aviv.

The lab is aimed at creating a platform for start-ups, technology firms and the academic community to explore innovations in the consumer goods industry, including around online shopping.

Meanwhile, growth plans are afoot in India, one of the group's top emerging markets in the region.

"We had a joint venture with Unilever, which handled our sales there, but it has decided to divest its stake," said Mr Agarwal.

"So one of the big things we're seeing through right now is to build a sales and distribution force from the ground up in India, one of the emerging markets that I'm most excited about."

The New York-listed firm counts the Asia-Pacific as one of its most profitable regions, where it racked up revenue of about US$3.7 billion (S$5.3 billion) in 2015, out of the global total of US$18.6 billion.

It is present in more than 30 Asia-Pacific countries, with the top developed ones such as South Korea and Australia contributing the bulk of sales.

"But I believe developing markets like China, with 15 million babies, and India, with 25 million babies, will command increasing shares going forward," said Mr Agarwal.

Last year proved a busy one for Mr Agarwal - and highly fruitful as well.

In November, he was named by CNBC as the Asia business leader of the year, an honour he attributed to his team.

"Clearly, you are recognised as a good leader because of the good work of your team," he said.

"The quality of the people in our country teams across the Asia-Pacific is something I'm very proud of. But that's not by chance. It's something we have worked to have."

It is partly the result of Mr Agarwal's insistence on developing a local leadership for each country.

"This is a very strong belief for me. In China, we have a 100 per cent local leadership team. South Korea, also 100 per cent. Singapore and Australia are almost at that level," he said.

"Having local talents leading our country teams is very important for consumer centricity. They are the ones who can understand the nuances of local consumer culture and give our business an edge."

At a more personal level, Mr Agarwal takes pride in an illustrious career in Asia's consumer sector, spanning not only Kimberly-Clark but also PepsiCo, where he led the beverage business for a decade in the Greater China region as chief operating officer.

The 57-year-old, born in Delhi, then headed PepsiCo's beverage and snack business in sub-Saharan Africa before joining Kimberly- Clark in 2008.

But China was where he made his mark.

"When I first went to China, PepsiCo's business there was still small. But we managed to gain share every single year. I've had the same success with Kimberly-Clark in China," said Mr Agarwal.

"That I've done it twice - being given a small business in a highly competitive market and growing it for scale and profitability - is perhaps the career achievement I'm personally most proud of."

He has also left his mark in Singapore, which he picked in 2012 to be Kimberly-Clark's Asia-Pacific headquarters.

This is where central decisions are made for the 8,000 people working for the firm across Asia.

Kimberly-Clark upped the ante last June with a major expansion of its Tuas manufacturing plant, pushing the group's total investment in Singapore to $400 million.

"It's an increasingly volatile world and I think having a strong presence in Singapore is important because that helps 'de-risk' our operations," said Mr Agarwal.

"It also helps that the country has good talents with strong digital capabilities."

whwong@sph.com.sg

This article was first published on Jan 09, 2017.
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