Changing lives in rural India

1. Changing lives in rural India

2. Rationale The private sector can contribute to social development even if governed by business objectives Developmental initiatives from the private sector will be sustainable and scalable only if they make business sense

3. Unilever in India • Unilever has been in India since 1895 • Hindustan Lever formally incorporated in 1956 • A subsidiary of Unilever (51.5%) • Most sought after recruiter among India’s B schools • Source of employment • 15,000 permanent employees • 200,000 indirect jobs

4. Hindustan Lever Limited • A $ 2.2 billion company • 16% operating margin • Market Capitalization: $14 billion • Market Leader across categories • Fabric wash, Personal wash, Dish wash, hair wash, skin applications, Talcum powders, packet tea, Jams • Number two: Toothpaste, instant coffee, ketchup • 23 of India’s 150 most trusted brands • 9 in top 20

5. The sales and distribution challenge • Seven million distinct outlets • one for every 29 households • 59% of these stores are in rural India • Organized modern retail formats very nascent • Multinational presence restricted by government • Unilever directly services over 1 million stores • A network of over 7000 stockists and distributors

6. Unilever: Sales & Distribution in India Modern Trade Organized retail Self-service stores General Trade Wholesale Family grocer Marginal retail Rural Trade Multi-purpose retail

7. Rural India - challenge and opportunity • 775 million Indians in 638,000 Indian villages • 1 in 8 people on this planet is an Indian villager • 4 million distinct outlets • A different life • 44% of urban per capita income • Low literacy, media reach: 624 million people lack access to TV • 30 million homes remain under the poverty line • A case for business • 52% of domestic product, 60% of consumption expenditure • Share of agriculture less than 50% of the rural economy • 50% decline in poor households, doubling of mid-income homes

8. Rural India - challenge and opportunity • 775 million Indians in 638,000 Indian villages • 1 in 8 people on this planet is an Indian villager • 4 million distinct outlets • A different life • 44% of urban per capita income • Low literacy, media reach: 624 million people lack access to TV • 30 million homes remain under the poverty line • A case for business • 52% of domestic product, 60% of consumption expenditure • Share of agriculture less than 50% of the rural economy • 50% decline in poor households, doubling of mid-income homes

9. Reachingmarkets Reachingconsumers and #1:Reach

10. IndirectCoverage Direct Coverage Accessibility Streamline Turnover per market HLL’s approach to rural distribution

11. Factory Direct coverage Stockist / Distributor Trade Depot

12. Village 3 Village 4 Stockist Village 2 Village 5 Village 1 Indirect Coverage

13. Star seller Star seller Star seller Streamline Distributor

14. IndirectCoverage Direct Coverage Accessibility Streamline Turnover per market HLL’s approach to rural distribution Direct reach: 16% of villages

15. Women in Rural India • Population: 361 million • 946 per 1000 vs. 901 in urban • Greater involvement in work force • 31% of rural women, vs. 11% in urban • India’s women earn $ 1,569 per capita, men $ 4,130 (PPP) • Access to education India’s most marginalized group

16. The role of micro-finance • The self-help group • Grameen Bank: mutual thrift societies of village women • A rapidly spreading movement: 6 million groups in India • 70% of rural households in AP • A micro-finance revolution • 8 million families have received micro-credit • 76% of micro-credit recipients have crossed the poverty line • 95% of micro-credit recipients are women • Effectiveness depends on opportunities for micro-enterprise

17. The role of micro-finance Low Income Low Savings Low Investment

18. The role of micro-finance Income + Micro-Enterprise Micro-Credit Investment Savings

19. The Shakti Entrepreneur program • Micro-enterprise opportunity • Underprivileged rural women are appointed as Shakti Entrepreneurs and trained to manage micro-businesses • Average earnings per entrepreneur: $16 per month • doubling monthly household income • supplementing other income • Piloted in 2001, scaled up rapidly • Now a network of 25,000 entrepreneurs in fifteen states

20. Impact • A network of local, credible brand endorsers, reaching 100 million people • Market growth and brand equity • significant increase in penetration and market shares • 15% of HLL’s rural business in districts of operation • Deterrent to counterfeits • counterfeit industry is 10-15% of total • Unique direct to consumer channel • Contact with two million rural homes every month

21. Searching for amedium AchievingInteraction and #2:Communicate

22. Shakti Vani • Social communication anchored on brands • health and hygiene • women’s empowerment • Village women are recruited as Vanis and trained to communicate • Vani audience: key opinion leaders, schools, SHG meetings, other village gatherings • Specially designed communication material • easy-to-carry kit: flip-charts, leave-behind posters, banners • content developed after in-depth understanding of local context

23. Hand-wash demo in schools

24. Achievingcontact ImpactingBehavior and #3:Influence

25. Shakti Activities Free Health Camps in Shakti Village

26. Free Dental Camps in Shakti Villages

27. iShakti • Rural community portal that creates access to information • Villagers can register as users and surf content areas: • Agriculture, health, veterinary services, education, employment opportunities, education, personal grooming, entertainment, games • All content backed by local language voice-over • On all content areas, users can pose queries • 1,000 kiosks in AP, partnership with government

29. Vision 2010 500,000 villages 600million Consumers 100,000 Entrepreneurs Shakti shall reacheveryhome in everyvillage,createsustainable livelihood opportunities, and enhancethe quality of life in rural India