Supporting small-scale distributors

Many small businesses and individual sellers help us to distribute and sell our products. We are working with many of them to boost their skills and incomes.

How we reach our consumers

Our products reach consumers through a network of retailers and distributors. International retail customers predominate in developed markets such as the US and Europe and are a growing presence in Asia.

Our products also reach consumers through a more diverse group of distributors, wholesalers and small independent retailers, outlets and kiosks. This more traditional route to market – which we call ‘distributive trade’ – makes a significant contribution to our business, especially in emerging markets. This diversified distribution network supports the incomes of millions of small-scale businesses and individual sellers around the world.

Exploring innovative distribution models

In emerging markets, we have found that we can serve more consumers and increase our market penetration through innovative distribution channels. This in turn can provide new sources of income for those we partner with to distribute our products.

Working in this way is not always easy. Often we are trying to cover smaller towns and villages which are spread out over large geographic areas. Given the relatively sparse population and often weak infrastructure links, we need to find ways of doing this that are economically viable.

Engaging micro-entrepreneurs in door-to-door selling is one way of getting our products to these hard-to-reach places. Our approach provides job opportunities by recruiting and training people to become part of the company’s sales network. This can involve providing them with extended credit, marketing, sales and accounting training and bicycles or other equipment.

To maximise the benefits for the people involved, we often work in partnership with local NGOs and government to ensure we understand the particular needs of these individuals and the socio-economic context in which they live and work.

For example, Shakti, our door-to-door selling operation in India, provides work for large numbers of people in poor rural communities. As part of our Sustainable Living Plan, we have set targets to increase the number of small-scale distributors with whom we work.

Targets & performance

Supporting small-scale distributors

  • Shakti, our door-to-door selling operation in India, provides work for large numbers of people in poor rural communities. We will increase the number of Shakti entrepreneurs that we recruit, train and employ from 45,000 in 2010 to 75,000 in 2015. We operate similar schemes in Bangladesh, Sri Lanka and Vietnam which we are also committed to expanding.

  • 48,000 entrepreneurs (‘Shakti ammas’) were selling products to over 3.3 million households in over 135,000 Indian villages in 2012.

  • achieved
  • on-plan
  • off-plan
  • %of target achieved

† Independently assured by PwC - see Independent assurance

 

Driving sales through Shakti in India

Our Shakti initiative in India started in 2000 and is a micro-enterprise programme that creates opportunities for women to sell a range of affordable Unilever products door to door in rural areas.

For Hindustan Unilever the initiative has significantly increased our ability to reach rural consumers. For the women involved, Shakti earnings typically double household incomes and involvement in the programme boosts their sense of self-esteem.

Progress in 2012

Recruiting and training female entrepreneurs (Shakti ammas) is a resource-intensive process. During 2012 we worked with our existing entrepreneurs to help them grow and develop their businesses. This has helped to consolidate and strengthen our network.

We are planning to expand our rural distribution over 2013-15 to reach more small, remote villages. Engaging more Shakti ammas is an important part of this plan.

Shakti sales people have proved successful in increasing our presence in rural areas and building strong local relationships with consumers, which encourages brand loyalty. The model we use improves the lives of our sales people and their families, usually doubling the income of the household.

In 2012, we improved our Shakti rural selling operation by part-funding mobile phones for a number of our sales women, equipping them with a simple application to drive sales. This low-cost but very effective mobile technology helps them sell the right products, saving time during sales calls while increasing sales and earnings.

Extending our Shakti programme

The programme was extended in 2010 to include ‘Shaktimaans’ who are typically the husbands or brothers of the Shakti ammas. They sell our products by bicycle to surrounding villages, covering a larger area than Shakti ammas can do on foot.

There are over 30,000 Shaktimaans across India and we have plans to enlarge the programme in 2013. These 30,000 Shaktimaans complement our 48,000 Shakti ammas.

Partnerships with telecoms and banking companies

In India, we have built alliances with industries such as telecoms and banking to enable Shakti entrepreneurs to sell telecom prepaid currency and SIM activations and act as a banking correspondent. This not only doubles the income of the Shakti family but also helps the community have better access to communication products and banking facilities, leading to sustained prosperity.

We have partnered with a leading public sector bank in India to provide banking services to rural consumers and low-income people in Shakti villages. A pilot was run in Maharashtra and Karnataka in 2011 with a dozen Shakti entrepreneurs helping local villagers open more than 1,000 bank accounts. We are working on a scaled-up model which will be implemented in 2013.

We also have a partnership with a leading telecoms company to sell its products and services across rural India. This initiative helps Shakti entrepreneurs increase their income by selling telecom products and services to retailers, as well as directly to consumers. After a successful pilot in 2011, the project has been rolled out in Gujarat, Uttar Pradesh, Karnataka, West Bengal and ten other states across India.

Boosting women’s incomes

The impact of economically empowering women has a magnifier effect on lifting families out of poverty. For example, in India, as a result of a partnership between the Maharashtra government and Hindustan Unilever, a woman entrepreneur was able to invest in a tomato-processing plant, contracting supplies from 600 smallholder farmers.

We trained the farmers in sustainable agricultural practices which contributed to high-quality tomatoes for our Kissan ketchup brand. In our Shakti rural sales operation, earnings usually double household incomes. For many, these new earnings mean they can realise their ambition to provide a good education for their children.

Project Hope & Fresh Start in Vietnam

Between 2007 and 2011, we worked in partnership with the Vietnam Women’s Union on Project Hope. The project created job opportunities by inviting women in several provinces to become part of our sales network. Unilever Vietnam provided women with extended credit, marketing, sales and accounting training, bicycles and other equipment. By the end of 2011, 300 women were working for this project, mainly in Mekong Delta provinces.

The Hope model became independent from Unilever Vietnam at the beginning of 2012, with the sales women contacting our local distributors directly to obtain products.

We continue to partner with the Vietnam Women’s Union to help create job and income opportunities for rural women through a micro-financing initiative called the Fresh Start Fund, which we began in 2008.

Through the Fund, women in rural provinces are provided with loans of around €80-€120 to help them generate income through investment in farming, animal husbandry and small-scale businesses. The programme also provides women with skills training and education on health, hygiene and nutrition.

Between 2008 and spring 2012, the project conducted over 1,000 skills and capacity-building courses for around 830,000 people. Over 13.5 billion Vietnamese dong (around €490,000) of credit has been provided to nearly 5,000 beneficiaries in the target provinces.

Project Guddi Baji in Pakistan

In Pakistan, we partnered with charities Idara-e-Taleem-o-Aagahi and TEVTA to design, develop, execute and expand the Guddi Baji (‘Good Sister’) programme. This initiative helps generate sustainable incomes for women in two main ways: through the sale of Unilever hygiene and personal care brands and through the provision of beauty services to other local women.

The participating women are provided with comprehensive beautician training, along with basic selling techniques and commercial product knowledge. This helps them to become home-based, skilled entrepreneurs, as well as brand ambassadors for Unilever in their locality.

Launched in late 2011, Guddi Baji is bringing our products into direct contact with a population base of 3.5 million women in 5,000 villages. The programme ties in with another Unilever initiative called Rahbar, which engages rural men as small distributors. Once trained, the Guddi Bajis are each linked to a Rahbar, who delivers Unilever stocks to their doors.

In 2012, we trained and recruited 911 women from more than 850 villages in rural Pakistan. Their monthly incomes amount to at least Rs 3,000 (around €24), increasing their social and economic status in their villages and helping them become a role model for the new face of rural Pakistan.

Project Aparajita in Bangladesh

Aparajita (formerly Project Joyeeta) is a similar initiative running in Bangladesh, in partnership with CARE International, a development NGO. In 2011, over 2,500 women sold Unilever products to 2 million households through 86 sales hubs set up by CARE.

Project Saubhagya in Sri Lanka

In Sri Lanka, our Saubhagya project works in a similar way and involves the Samurdhi Authority, the government agency responsible for poverty eradication. By the end of 2012, around 2,500 entrepreneurs – nearly all of them women – were involved in the programme.