PRESENTED BY:VISHAL PATEL

SHWETA 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-credit
Shakti 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

AT
RS.5

AT
RS.5

AT
RS.2

AT
RS.5

AT
RS.5

AT
RS.5

AT
RS.1.50

AT
RS.6

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

HLLs approach to rural distribution

Indirect

Direct

Accessibility

Coverage

Coverage

Streamline

Turnover per market

Direct coverage

Factory

Depot

Stockiest / Distributor

Trade

Indirect Coverage
Village 3

Village 4
Stockist

Village 2

Village 5
Village 1

Streamline

Star seller

Star seller

Distributor

Star seller

The role of micro-finance

The self-help group

Grameen Bank: mutual thrift societies of village women
A rapidly spreading movement: 6 million groups in India
70% of rural households in AP
A micro-finance revolution
8 million families have received micro-credit
76% of micro-credit recipients have crossed the poverty
line
95% of micro-credit recipients are women
Effectiveness depends on opportunities for microenterprise

Shakti Vani
Social communication anchored on brands
health and hygiene
womens 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. iShakti 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)

Varying levels of prosperity > affected the level of
infrastructure and ability to access villages
Status of women across rural societies differed
At least 12 different languages and dialects - made it difficult
for rural sales people to work across a state
Many entrepreneurs, being barely literate and
underprivileged and living in a male dominated society, had
little self-confidence

o
o

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

Lower-income consumers

number of homes visited, instead of sales

made; and delayed first loan payment.

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.