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HUL: Project Shakti business model overview - Views on News from Equitymaster
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  • 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.



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


    Jul 31, 2016

    Please send me project shakthi report



    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......!



    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)


    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)


    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!

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