Hindustan Unilever’s rural distribution network, composed of Indian women micro-entrepreneurs, has become a lifeline during the pandemic. The project has given them a source of income, while distributing Unilever’s products directly to rural consumers, without the need for a physical store.
140,000 female entrepreneurs across 18 states benefit from this project
In the early 2000s, HUL started ‘Project Shakti’ to serve thousands of villages and provide employment to tens of thousands of women in India, the second most populated country and the third biggest grocery market in the world. The goal is two-fold: (1) to empower rural women by making them entrepreneurs; and, in the process, (2) increase penetration of Unilever’s food, home and personal care products. Since then, this project has now grown to a network of around 140,000 women entrepreneurs (or ‘ammas’ as they are called in local language), spread across 18 states in India.
‘Shakti ammas’ are empowered to work as micro-entrepreneurs in rural areas
This project targets women, in particular, as they are usually excluded from employment in India. And for those who are part of the workforce, they generally receive less income than men. Excluding women from the benefits of employment not only leaves them materially worse off. It also negatively affects their mental health, and self-esteem. By empowering these women to work as micro-entrepreneurs of grocery items in rural India, Unilever has provided them an avenue to be financially independent, while leveraging their local knowledge on how to sell Unilever’s products directly to the ‘hard to reach’ homes in their villages.
Rural distribution network has become a lifeline during the pandemic
As more people have been staying at home because of COVID-19, these women entrepreneurs took care of distributing groceries from house to house. HUL’s Shakti network now covers half the villages in rural India – 2x the 25% coverage four years ago. When the supply chain got disrupted due to the pandemic last year, this network has helped Unilever in ensuring that rural households have access to their daily necessities. HUL’s Executive Director for Sales and Customer Development, Srinandan Sundaram, commented, “Shakti has got the scale and is now part of our mainstream business. During COVID, this channel led growth for us. There were enough instances of Shakti entrepreneurs travelling to the distributor to pick up stocks and come back to distribute to the households in their vicinity. This dramatically stepped-up physical reach of our products, making them available to possibly the most vulnerable sections of society.” Sundaram added that Shakti’s contribution to the company’s turnover has further increased, and this channel has significantly outgrown the overall growth of Hindustan Unilever.
Reverse migration during the pandemic has helped rural grow ahead of urban India
Rural communities generally account for a third of sales of consumer goods, with multinational companies such as HUL well above the median. The pandemic has made rural even more important as people have been migrating back to their hometowns, and continue to work from home, where possible, or find alternative sources of livelihood. This means more potential customers to serve, and these Shakti ammas have leveraged this opportunity. Although 2020 has been a challenging year for almost all businesses, the micro-entrepreneurs who are part of this network have earned better than the preceding year. In fact, their average income has grown 1.3 times in the past four years.
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