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HUL: Project Shakti business model overview

Aug 10, 2009

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.

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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.

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

na uss

May 21, 2021


dear sir
i want full information about shakti project please

Like 

Yadhu Gopal G

Apr 7, 2020

Please mail me the model

Like 

Tushar

Apr 2, 2020

Please mail me the model.
Thanks

Like 

kishor

Nov 26, 2018

Its a very good opportunity for development and employment opportunity in rural areas. India is in its villages and so if villages develop so shall India. We also have a project related to distribution of product in rural areas particularly which requires women, so in case if anybody interested we can work together

Like (2)

deepali

Jan 30, 2018

kindly provide me with the project shakti business model.

Like (3)

Shrikanth

Jul 31, 2016

Please send me project shakthi report

Like (3)

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 (1)

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 (4)

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)
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