Unilever’s project Shakti was born in December 2000 in a district called Nalgonda in Southern India state of Andhra Pradesh. The idea was to extend Hindustan Lever’s reach into the untapped and highly inaccessible markets of rural India. The focus was on the full range of Unilever products such as Detergents, Personal Care Products, Beverages and Foods. In addition, a social objective was to provide sustainable livelihood opportunities for underprivileged rural women. In many Indian languages Shakti means strength or empowerment.[iii]

 

Over 70% of India’s 1 billion population live in rural villages where per capita income is 44% of that in urban India. Hindustan Lever think that this will reach urban levels in 10 years. [iv]Shakti faced three major challenges. First, whilst the aggregate rural potential in India is massive the target market is scattered over a vast area and the per capita consumption levels are low. Second, the 637,000 villages and townships are not connected to urban centre by air or rail and road connectivity is very poor. And third, the products needed to be affordable. This latter meant not just the price point itself but even the unit size itself. This is an issue that CavinCare of Chennai tackled with their sachet size products which Unilever copied fast.

 

Project Shakti built momentum with a number of innovations centred on building the network and brand awareness. For example, Shakti Vani. Vani is Hindi for “voice” and  the idea was to appoint, train and position local women as experts on matters relating to personal and community health and hygiene. Working to an organised journey plan the Vani would cover a group of villages, organising school visits and village get togethers and use other social means to get the message across. By February 2005, 500 Vanis covered 20,000 villages and their pay was between $60 to $150 per month. By 2008 this had grown to 44,000 rural women reaching around 3 million homes daily in 500,000 villages. The plan is to move to 600 million consumers through 10,000 entrepreneurs by 2010.

 

The salary of the Shakti team has a tremendous impact on the capacity to consume of the districts where they operate. This is part of the root of what Kishore Biyani of the Future Group has identified as key to sustainable development – consumption.[v] And this is where organised retail and FMCG companies can make significant contributions within the informal economy, to the connectivity with the formal market and, to innovation within the formal economy itself.

 

iShakti, the portal was set up to strengthen project Shakti through extending the benefits of information technology to rural India. A computer was set up in the home of a Shakti entrepreneur and this is to be available to the community as a means of empowerment. This initiative has the potential of bringing the internet to villages that had never seen a computer or even a television. This part of the project has far to go.

 

Investment in project Shakti was significant reaching 15% of sales by 2004. And the cost of iShakti added another 3 to 5% of sales. However, the project broke even by 2004. In terms of understanding the informal market and how to reach it and engage with it there have been many learnings.

 

India may well be the worlds biggest democracy but it is far from being homogenous. In fact, diversity is its greatest strength but also its greatest challenge. Project Shakti, and any project tackling the informal markets of the world has to understand the territory. Five of India’s States were enthusiastic supporters of Shakti but others were even hostile. Closely linked to the prosperity of the State was the level of infrastructure and that impacted accessibility and viability of the project. Cultural issues varied in strength. For example, the status of women in rural society differed across states. In some places the idea of a woman venturing out of her home to sell products in other homes was anathema. And the language issue cannot be underestimated in a country with 27 official languages. Project Shakti operated in 12 languages and then dialects made even this level of communication difficult. Above all, the challenge of building up the self confidence and motivation of these underprivileged women as they came to terms with their Shakti status cannot be underestimated.

 

Project Shakti operated in media dark areas where television advertising could never reach. It moved the marketplace frontline away from local outlets who would champion other products into the homes of families in the remotest of areas. And the overall objective is to generate 15% of revenues through reaching 250 million additional consumers in the informal rural market through 100,000 Shakti entrepreneurs by 2010.   

 


[i] Economist Study on Global Retail (2006)

[ii] Business India (May 2008)

[iii] V.Kasturi Rangan & Rohithari Rangan, HarvardBusinessSchool Business Case, Unilever in India – Project Shakti (June 2007)

[iv] Outlook Magazine, India (March 2008). Section on Agri Stocks.

[v] Kishore Biyani, It happened in India (2007)

[vi] Forethought Section, Harvard Business Review, South Asia. (April 2008)

[vii] Inca Cola: The curious Peruvian Cola or the story of the little cola that could. (September 2006)

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