Name of Company Parent Company Sector Programme Hindustan Unilever Unilever Case Study Unilever Household Personal Goods and Food & Beverage Producers Shakti 1. The Millennium Development Goals Please select 1. Eradicate extreme poverty and hunger which of the 2. Achieve universal primary education MDGs your 3. Promote gender equality and empower women programme or 4. Reduce child mortality is 5. Improve maternal health impacting 6. Combat HIV, AIDS, malaria & other diseases 7. Ensure environmental sustainability 8. Develop a global partnership for development 2. Geography Please indicate where in the world your programme or is impacting 3. Context Please describe the background to your programme or ; the situation on the ground or in the market in which they are operating Central America Central Asia Europe Middle East North Africa North America Pacific Nations South America South Asia South East Asia Sub-Saharan Africa If you prefer to name specific countries please name up to a maximum of three where your programme is having the most impact. 1. India 2. 3. Over 70% of India's one billion people live in rural areas. While poverty remains widespread, the consumer potential of rural populations is growing. In the five-year period ending in 2007, rural Indians consumer spending grew faster than that of city dwellers. Average GDP per capita in India was $3,100 in 2009, and the per capita consumption in rural areas is still 33% of urban levels, even though it is growing rapidly. The rural poor targeted by Hindustan Unilever have little disposable income and can spend no more than a few rupees on its range of foods and home and personal care products. By making its produts more widely available and accessible in terms of cost, Hindustan Unilever sought to improve the health and hygiene practices of these consumers as well as growing its sales. 1 P a g e
For many years, Hindustan Unilever had reached some of these rural populations through tools such as van road shows, but a large share remained outside its reach. Problems included poor transportation networks, small, scattered settlements, high illiteracy rates and poor media penetration that made conventional advertisement methods ineffective. 4. Rationale Please state the reasons for initiating the project or 5. Objectives Please indicate the objectives for the project Hindustan Unilever sought to increase its reach in rural areas by building a distribution system through a network of women micro-entrepreneurs to get its products directly to consumers in remote villages. This initiative is known as "Shakti", (meaning "strength") and responds to the needs of the rural poor. Hindustan Unilever's idea was to create low-risk, profitable microenterprise opportunities for women to become direct-to-home distributors of its products. By selling directly to consumers, the women take on a role of influencers, strengthening their position in the local community. The company focused on women, not only because women tended to be its main consumers, but also because of the belief that giving additional income to women would result in greater benefits for the household as a whole. Shakti contributes to MDG 3: promoting gender equality and empowering women and also to MDGs 4 and 5 on reducing child mortality and promoting maternal health through its health education programmes. 6. Mechanics Please give a description of how the project functions and was/ is implemented The Shakti initiative started out by tapping into women's self-help groups that were based on the Grameen model of microfinance. It began in Andra Pradesh in 2000. By the end of 2009, 45,000 women were selling Hindustan Unilever products in over 100,000 villages. The model: A distributor delivers stock at the woman s doorstep. She then distributes it directly to consumers and to retail outlets in her host and satellite villages. The products are packaged in quantities small enough to be affordable to rural buyers and often cost as little as half a rupee each. A rural sales promoter is responsible for several villages at a time and provides a helping hand to the women as they grow their businesses. To recruit entrepreneurs, Hindustan Unilever makes presentations at women s self-help group gatherings. The self-help groups also provide the micro-finance that enable the entrepreneurs to get started. 2 P a g e
7. Business Benefits Please provide details of how the business has benefited from the project Skakti is not a one-company effort. It involves a variety of other non-state and state actors and has worked with over 400 organizations to date to recruit the women, provide associated training (such as book-keeping) and roll out related initiatives. The women have little education; to address this skills gap, intensive training is required to help them become distributors who are confident and independent. Due to the intense level of effort required, a team of about 1,200 people at Hindustan Unilever is involved in the initiative. i Shakti and Shakti Vani: To increase the credentials of Shakti entrepreneurs and enhance the standard of life of the rural community, social activities such as medical camps and education programmes are run. Hindustan Unilever has created ishakti which provides rural India with access to information and social communication. The ishakti community portal, piloted in Andhra Pradesh, empowers communities by creating access to relevant information (such as employment, health and agriculture) via computers in the homes of Shakti entrepreneurs. Educational initiatives are important because lack of awareness of basic hygiene practices is estimated to kill over 500,000 children in rural India every year. By creating Shakti Vani, Hindustan Unilever seeks to spread awareness of good practice in health and hygiene, while also benefiting the business. Under this scheme, a local woman is appointed as Vani (voice) for a cluster of villages. She receives training on personal and community health, such as the importance of washing hands with soap and advice on pre- and post-natal care. The women are also provided with communication materials, such as pictorial information that can be understood by illiterate people. Women attend meetings, organise school contact programmes and use other social occasions to spread the word on improving health and hygiene. The Vani project operates in over 20,000 villages. It makes a contribution to MDGs 4 and 5 - reducing child mortality and improving maternal health. Shakti has resulted in significant new business for Hindustan Unilever. It contributes 10% of the company s rural business and has accounted for 40% of its growth in some rural markets. In Shakti areas, the company s market share is estimated to be about 10% better than in non-shakti markets. In addition to the immediate financial benefits, the work of Shakti entrepreneurs as brand ambassadors has been crucial for building longterm brand loyalty for Hindustan Unilever. While the various Shakti programmes have been costly to set up, increased awareness about hygiene is expected to increase sales in the long term as well as benefiting community well-being. 8. Society Benefits Please provide Shakti has led to increased income for women and improved community details of the wellbeing. 3 P a g e
social and community benefits of the project or A typical entrepreneur earns about $15 to $20 per month, often doubling household income. Margins are usually higher with the direct to consumer option than in the retail outlet option, where maximum margins are limited to 3%. 9. Lessons Learned Please provide a summary of the key insights and lessons learned through the project or In 2010, the initiative is expected to generate an annual combined income of over $25 million for Shakti entrepreneurs. This additional money in the hands of women is significant, since they have limited other income generating opportunities and are more likely to invest their income towards the overall benefit of their family. Through Shakti, women acquire education, improved standing in their communities and greater self-esteem. They are often treated with more respect by their family, since they provide additional income. One study found that the project made a number of women aware that girls need sufficient education to be able to generate their own income. Shakti entrepreneurs tend to be more confident about socializing, more likely to take lead roles in public activities, and they enjoy higher recognition and social status among local people. Several lessons have been learned since Shakti was initiated over a decade ago. 1) The need for commitment and patience in reaching untapped markets such as India s rural poor. Shakti is a long-term effort. It relies on a cost and resource-intensive distribution model, with one dedicated person assigned for every 35 to 40 entrepreneurs. This high level of input has required strong company commitment to the initiative s vision, as well as creativity and flexibility in changing the approach. Hindustan Unilever has viewed Shakti as crucial to building brand loyalty and reputation with a large future consumer segment. The company knows that working with women in rural communities is not only helping local communities but also establishing it as a leader in gender issues and creating positive reputation effects. 2) Multi-sector partnerships can strengthen the distribution model. Shakti has partnered with over 400 organisations across India. Partnerships have been crucial for increasing the programme s credibility and ensuring adequate outreach. 3) The alignment of business goals with people's personal commitment. The team that built Shakti was driven by passion and commitment, reinforced by awareness of the positive impact that Shakti has on society. 4) As Hindustan Unilever plans for Shakti s future, it has realised that the temptation to quickly scale up would be counterproductive and may not be manageable or sustainable. Instead, it is focusing on consolidating 4 P a g e
the network and ensuring that existing Shakti entrepreneurs are strengthened and can increase their profits for the overall benefit of their communities. 10. External endorsement and available data/sources of information Please list any This is an extract from a case study produced by the Global Private awards that the Sector Leaders Forum, an initiative of the World Bank Group Gender programme has Action Plan to engage private sector leaders in promoting women's received any economic empowerment. The full study is available at: supporting resources to http://pslforum.worldbankgroup.org/casestudies/unilever/index.aspx accompany this case study 5 P a g e