PRESENTED BY: -VISHAL PATELSHWETA RAI

ORIGIN

HLL was an established brand in India, largely successful in urban regions

• Urban market growth rates slowing down • Urban competition heating up• HLL enjoyed greatest reach into rural markets, but rivals

began to emulate rural distribution initiatives• HLL knew it needed to find new markets• Direct reach was only 16% of rural markets

PROJECT SHAKTI

Project head of shakti project was sharat dhall.Project Shakti - an ambitious venture by HLL to

spur growth and penetration of its products in rural India while changing lives and boosting incomes. Sales and Distribution initiative – delivers growth Communication initiative – build brand Micro-enterprise initiative – creates livelihoods Social initiative – improve standard of living in rural

India

Project Shakti was born in Dec 2000, in the district of Nalgonda, in the Southern Indian state of Andhra Pradesh.

Project Shakti: The Objectives

• HLL's New Venture Division identified rural India as a key source of growth and competitive advantage

• HLL argued that access to rural markets would be the big differentiator among FMCG companies

• Business objectives: extend HLL's reach into untapped markets and to develop its brands through local influencers.

• Social objectives: provide sustainable livelihood opportunities for underprivileged rural women.

Why Women?

Women are the target consumers for most of HLL products

Rural women constituted the most marginalized group in society 

Rural women were more likely to appreciate the additional income than affluent ones in urban areas

Women were more likely to access into homes of potential consumers in villages

Focus on women would have greater impact on the entire household - leads to improvements in health, hygiene, and education levels

Most men would be occupied with other employment and would not devote as much time to the activity

Strategy

SHG - functioned as mutual thrift societies• 10-15 women in a village would form a group• Small member contribution to common pool• Sponsoring agency gave micro-creditShakti Entrepreneur• Borrowed money from SHG for purchases• Tasked to sell HLL products in the village• Generated significant income for themselves

SOME OF THE PRODUCTS SOLD THROUGH PROJECT SHAKTI

ATRS.2AT

RS.5

AT RS.1.50

AT RS.6

AT RS.5

AT RS.5

ATRS.5

AT RS.5

Distribution

It is the combination of the 3 ways:• Door to door selling (11% margin

on sales)• Sells from own home (11% margin

on sales)• Retailers (3% margin)averages sales :Rs. 10,000 - Rs. 15,000/month, profit - Rs.1,000 per month

HLL’s approach to rural distribution

Acc

essi

bilit

y

Streamline

Turnover per market

Indirect Coverage

Direct Coverage

Direct coverage

Factory Depot Stockiest / Distributor Trade

Indirect Coverage

Village 1

Village 2

Village 3

Village 4

Village 5

Stockist

Streamline

Star seller

Star seller

DistributorStar seller

The role of micro-finance

The self-help groupGrameen Bank: mutual thrift societies of village women A rapidly spreading movement: 6 million groups in India70% of rural households in APA micro-finance revolution 8 million families have received micro-credit 76% of micro-credit recipients have crossed the poverty

line95% of micro-credit recipients are womenEffectiveness depends on opportunities for micro-enterprise

Shakti Vani

• Social communication anchored on brands– health and hygiene– women’s empowerment

• Village women are recruited as Vanis and trained to communicate

• Vani audience: key opinion leaders, schools, SHG meetings, other village gatherings

• Specially designed communication material– easy-to-carry kit: flip-charts, leave-behind posters, banners– content developed after in-depth understanding of local context

Hand-wash demo in schools

Shakti Activities

Free Health Camps in Shakti Village

Free Dental Camps in Shakti Villages

i - Shakti

• In 2010, they started “i-Shakti” an IT-enabled community portal across the state of Andhra Pradesh. i-Shakti is designed to give rural people access to information via a network of village “kiosks” containing internet linked computers run by entrepreneurs.

• Villagers can access free content, developed in their local language, or email questions on a wide range of topics, including Unilever products, health and hygiene, agriculture, education, finance and employment.

• The aim is to have 3000 i-Shakti kiosks on stream by the end of 2010 covering 9500 villages and 18m people.

iShakti Contd……

• Rural community portal that creates access to information

• Villagers can register as users and surf content areas:– Agriculture, health, veterinary services, education, employment

opportunities, education, personal grooming, entertainment, games

• All content backed by local language voice-over

• On all content areas, users can pose queries

• 1,000 kiosks in AP, partnership with government

Appearance of ishakti kiosks

Scaling Up Issues

• HR (including management) costs ballooned - 10% to 15% of Shakti revenues

• Vani and iShakti programs ran at 3% to 5% of sales.

• Regional (State Specific issues)o Varying levels of prosperity > affected the level of

infrastructure and ability to access villageso Status of women across rural societies differed o At least 12 different languages and dialects - made it

difficult for rural sales people to work across a stateo Many entrepreneurs, being barely literate and

underprivileged and living in a male dominated society, had little self-confidence

Targets & Performance

Target:• Original: To reach 250 million additional

consumers through 100k entrepreneurs by 2010• Revised: To increase the number of Shakti

entrepreneurs that we recruit, train and employ from 45,000 in 2010 to 75,000 in 2015.

Performance:• In 2004, PS grew to >15% of HLL's rural turnover • By 2011, 45,000 entrepreneurs (‘Shakti ammas’)

were selling products to over 3 million households in 100,000 Indian villages.

CONCLUSION

Project Shakti is enabling families to live with dignity and in better health & hygiene, education of the children and an overall betterment in living standards.

it creates a win-win partnership between HUL and the rural consumers for mutual benefit and growth.

Challenges Limited infrastructure facility Poor reach of electronic media Lower literacy rate Lower Purchasing power Poor developed distribution channels Avoid channel conflict Lack of Trained Staff (Proper identification of Entrepreneurs) Storage of HLL stock Language barrier The status of women in rural society differed across states To get in touch with government, NG0, SHG and mainstream HLL sales force SKU vs LUP Roll out problem Training program to equip the Shakti entrepreneurs To get brand managers to invest in the project To motivate the project team The greatest challenges that Shakti face are costs and management control

to make it profitable

Crossing the Chasm

Challenge Solution

These women had never undertaken economic activities

A Rural Sales Person (RSP) hired to coach Shakti entrepreneurs

1st few months were the most difficult for entrepreneurs

Change in incentives: Cash rewards for number of homes visited, instead of sales made; and delayed first loan payment.

Lower-income consumers HLL introduced low-unit-price packs = Sachet

By 2004, HLL was selling sachets of shampoo, hair oil, detergent, skin creams, tea, toothpaste, and soap to rural India.