Fast-moving consumer goods (FMCG) giant Hindustan Lever Ltd (HLL) has launched a first time mega project — on an experimental basis — to study how a model stockist should operate. While the company asserts that this is just an experiment being conducted in the Parel region of Mumbai, HLL’s dealers say the results of the experiment could lead to the company considering making changes in the existing set-up of redistribution stockists.
Dealers add that, based on this model, the company may want to go in for a fewer number of stockists handling larger areas of outlets in the future. This could mean lower costs for the company, they say.
In response to FE’s query on the Parel mega project, an HLL spokesman said: “In the Parel region, we are experimenting on how a model stockist should operate. This is only an experiment to learn, and at this stage there is no plan to roll this out. Beyond this, we have no more comments to make.”
The company is said to be experimenting with this new concept, starting with a star stockist in Parel region who will individually handle a large area of, say, about 5,000 outlets or so.
According to sources, the multinational, which markets leading brands like Lifebuoy, Lux, Sunsilk and Surf, has also merged its various product portfolios at the stockists’ end. Thus, a particular stockist who was earlier dealing only with one or two product portfolios of the company — such as personal products, beverages and foods — would now deal in all the portfolios.
However, the HLL spokesman said: “In Mumbai Metro, HLL has over 50 redistribution stockists, taking into account all the company businesses. Many of the redistribution stockists are already attached to more than one business of the company.”
At present, HLL’s products are distributed through a network of about 7,000 redistribution stockists covering about one million retail outlets in urban India. A redistribution stockist deals mainly with financing stocks, providing manpower, servicing the retailers, implementing promotional activities, extending indirect coverage, reporting sales and stock data and screening for transit damages.
HLL has also implemented an IT-powered system to supply stocks to redistribution stockists on a continuous replenishment basis. Stockists have been connected with the company through an Internet-based network, called RSNet, for online interaction on orders, despatches, information sharing and monitoring. RSNet covers about 80 per cent of the company’s turnover, according to the company’s website.