Hindustan Lever Limited, has boosted its sales in rural India by 20% in six months as the result of an initiative dubbed "Project Shakti”. HLL has successfully wedded micro-marketing with micro-credit, the financial system in which Micro Banks lend poor individuals, usual women, tiny amounts of money to set up in business.
Instead of spending marketing money to push its products, HLL is providing enterprise management training and support to rural self-help groups that banks and governmental bodies have set up across rural India over the past five years. Micro-credit typically lends a woman enough money to buy a sewing machine or cow.
The self-help groups use micro-credit to become direct-to-home distributors, with the aim of "alleviating poverty and reducing disparities of purchasing power," according to Debasis Ray, general manager, corporate communications, at Unilever in India.
HLL provides the groups with a range of its mass-market products which are relevant to rural consumers, such as Lifebuoy soap, Wheel detergent, A1 tea, Nihar coconut oil and Clinic Plus shampoo.
For the groups, the project provides critically needed sustainable jobs contributing to better living standards and prosperity. For HLL, it translates into access to hitherto unexplored territory. The company also benefits from the fact there are low costs associated with expanding the distribution network as direct-to-home sellers mingle with target consumers and talk to them in their own dialects about the products.
Project Shakti was launched in around 50 villages in the Nalgonda district of the southern state of Andhra Pradesh last year. It has since extended to 400 self-help groups in the state. HLL is now fine-tuning the project and is looking to introduce the scheme to the states of Gujarat, Maharashtra and Madhya Pradesh. The company plans to cover 75,000 villages over the next two years.
India's rural communities contribute almost 50% of Unilever's total sales of $2.2 billion in the sub-continent and that percentage is higher in some of the company's major categories such as detergents, personal wash and beverages.