X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
HUL: Project Shakti business model overview - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Aug 10, 2009

    HUL: Project Shakti business model overview

    With the urban market saturated, FMCG companies are now targeting the rural markets. In spite of the income imbalance between urban and rural India, rural holds great potential since 70% of India's population lives there. Due to the recent government measures like waiver of loans, national rural employment guarantee scheme and increasing minimum support price, disposable income in rural India has been rapidly increasing. However, rural markets present their own sets of problems. These include poor infrastructure, dispersed settlements, lack of education and a virtually nonexistent medium for communication. Furthermore, retailers cannot be present in all the centres as many of them are so small that it makes them economically unfeasible.

    Hindustan Unilever Limited (HUL) to tap this market conceived of Project Shakti. This project was started in 2001 with the aim of increasing the company's rural distribution reach as well as providing rural women with income-generating opportunities. This is a case where the social goals are helping achieve business goals.

    The recruitment of a Shakti Entrepreneur or Shakti Amma (SA) begins with the executives of HUL identifying the uncovered village. The representative of the company meets the panchayat and the village head and identify the woman who they believe will be suitable as a SA. After training she is asked to put up Rs 20,000 as investment which is used to buy products for selling. The products are then sold door-to-door or through petty shops at home. On an average a Shakti Amma makes a 10% margin on the products she sells.

    An initiative which helps support Project Shakti is the Shakti Vani programme. Under this programme, trained communicators visit schools and village congregations to drive messages on sanitation, good hygiene practices and women empowerment. This serves as a rural communication vehicle and helps the SA in their sales.

    The main advantage of the Shakti programme for HUL is having more feet on the ground. Shakti Ammas are able to reach far flung areas, which were economically unviable for the company to tap on its own, besides being a brand ambassador for the company. Moreover, the company has ready consumers in the SAs who become users of the products besides selling them.

    Although the company has been successful in the initiative and has been scaling up, it faces problems from time to time for which it comes up with innovative solutions. For example, a problem faced by HUL was that the SAs were more inclined to stay at home and sell rather than going from door to door since there is a stigma attached to direct selling. Moreover, men were not liable to go to a woman's house and buy products. The company countered this problem by hosting Shakti Days. Here an artificial market place was created with music and promotion and the ladies were able to sell their products in a few hours without encountering any stigma or bias.

    This model has been the growth driver for HUL and presently about half of HUL's FMCG sales come from rural markets. The Shakti network at the end of 2008 was 45,000 Ammas covering 100,000+ villages across 15 states reaching 3 m homes. The long term aim of the company is to have 100,000 Ammas covering 500,000 villages and reaching 600 m people. We feel that with this initiative, HUL has been successful in maintaining its distribution reach advantage over its competitors. This programme will help provide HUL with a growing customer base which will benefit the company for years to come.

     

     

    Equitymaster requests your view! Post a comment on "HUL: Project Shakti business model overview". Click here!

    14 Responses to "HUL: Project Shakti business model overview"

    Shrikanth

    Jul 31, 2016

    Please send me project shakthi report

    Like 

    Jaggi

    Nov 28, 2015

    I worked and that was worst exp with shakti at Punjab ,,,,,,,,,,,,friends don't spoil your carrier in shakti , it is totally fraud........... they sell there product in urban areas and showing there sales in rural , all senior most person knows everything. they just need sale target, they giving only 8000 Rs included everything even a MBA person ............ha ha so anybody tell me how we can work withing this amount.............! i was handled 700 near about shops under 25 approx sub distributor, 75 % was not running , and 60% or more than that was only for paper work. .................! and lots of exp which i can't explain you here...............!Fraud Fraud Fraud................! for everything HUL and HFS both responsible for this......!

    Like 

    Archana

    Oct 14, 2015

    Can you please provide me the contact in HUL for further infromation on Shakti Project. I work in an organisation which has a membership of 1.8 million women workers of infromsl sector and are spread across 14 states of India.I am interested in taking this program to the members so that they can beocme economically empowered.

    Like (2)

    hemkrushna borkar

    Jan 23, 2013

    dear sir
    i want full informetihon bout shakti project

    Like (1)

    subrat kumar barik

    Nov 20, 2012

    i make my SIP on shakti project,what i seen,this project initiate all rural woman as well as her husband,who have the cabability of doing something,but due to lack of opportunity ,they had missed it,but now due to HUL ,they got a chance by which they earn money, by them the company makes profit, as a result our nation grow,so it is a great segmetation by HUL,,,,,(IT GENERATE EMPLOYMENT)

    Like (2)

    ketan kohtiya

    Oct 19, 2012

    i want just information regarding to shakti project

    Like (2)

    aniruddha tambe

    Sep 1, 2012

    Projects like Project Shakti will go a long way in ensuring inclusive growth in India.It is amply clear that India can never progress unless it empowers its womenfolk. By this token, Project Shakti is not only encouraging the enterpreneural spirit in the rural women but is also working towards financial independence of the women. Empowerment of women is sure to improve the social status of women in India.

    Like (2)

    rakesh yadav

    Sep 21, 2011

    really hul,s project shakti is changing life style of villagers. they are feeling good

    Like (3)

    sibesh

    Sep 2, 2010

    shakti it gives better idea about this concept.basically its good project but the ground level employee should not get more money.the higher employee get more salary then lower employee but the main work done by lower employee.i must say company should pay more attention to lower lever employee.if it not happens the lower employee do-not perform his best.now the company gives new Nokia set -2700 with i shakti version but it is very difficult to handle due to the expenses.company is ganging more but less attention to excutives those who gives his entire time marketing without any insurance and any accomadtion. it is the violation of labours act.plz give kind attention to lower marketing excutives who gives more revenue to company and less salary.

    Like (4)

    Saurabh

    Jul 31, 2010

    Project Shakti is no doubt a very good initiative by HUL. But there seems to be some problem with this project. At ground level the story is completely different. Its like Shakti Amma is not the real enterpreneur but still its her.husbandI have seen a bill of shakti outlet beeing given to an outlet in some other village. I have also heard that the Sales force involved in making shakti points sell the products in the mainline towns and show it in the company as shaktibill.
    There are surely maupulation done at lower level and Levers must check it. Otherwise it will backfire.

    Like (4)
    Equitymaster requests your view! Post a comment on "HUL: Project Shakti business model overview". Click here!
     

    More Views on News

    Marico: Earnings Hit by Lower Volumes and Firming Input Prices (Quarterly Results Update - Detailed)

    Aug 9, 2017

    While GST implementation brought down volumes and profitability in the short run, Marico remains optimistic in the long run.

    HUL: A Slow End to a Dull Year... (Quarterly Results Update - Detailed)

    May 9, 2016 | Updated on May 11, 2016

    HUL announced its results for the quarter and year ended March 2016. While revenues rose by 4% YoY, net profits increased by 7% YoY.

    Hindustan Unilever: Deflationary Pressures Curb Growth (Quarterly Results Update - Detailed)

    Jan 21, 2016

    HUL announced its results for the quarter ended December 2015. While revenues were up by 3% YoY, profits came in lower by 22% YoY.

    Hindustan Unilever: Fails to meet expectations (Quarterly Results Update - Detailed)

    Oct 16, 2015

    HUL announced its results for the quarter ended September 2015. While revenues were up by 4% YoY, profits came in lower by 3% YoY.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    HIND. UNILEVER SHARE PRICE


    Aug 18, 2017 (Close)

    TRACK HIND. UNILEVER

    • Track your investment in HIND. UNILEVER with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks

    MORE ON HIND. UNILEVER

    HIND. UNILEVER - HYPERMARCAS COMPARISON

    Compare Company With Charts

    COMPARE HIND. UNILEVER WITH

    MARKET STATS