Supporting micro-enterprise

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.

As part of our Sustainable Living Plan, we have set targets to increase the number of micro-entrepreneurs that we work with:

• 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.

Driving sales through Shakti in India

In emerging markets, however, Unilever relies not only on distributors, wholesalers, small independent outlets and kiosks to serve its consumers but also creates ways to reach populations in remote areas. Such areas typically have limited or no retail distribution networks, little or no advertising coverage and poor roads and transport links.

To reach them Hindustan Unilever has recruited and trained women in rural areas to act as direct sales operators.

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. By the end of 2010, over 45 000 entrepreneurs were selling products to 3 million households in 100 000 villages.

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 boost their sense of self-esteem. For many, their new earnings mean they can realise their ambition to provide a good education for their children.

Following the completion of a pilot in the eastern state of Orissa in 2010, the Shakti model was extended with the introduction of ‘shaktimaans’ – men on bicycles. Each shaktimaan is given a sturdy bicycle to travel to villages within a 5 km radius. His job is to distribute products such as Wheel washing powder, Lifebuoy soap, and Brooke Bond tea, to both consumers and small retail outlets. One of the main triggers for this move has been the improvement in the roads, enabling cyclists to reach remote villages.

Project Aparajita in Bangladesh

Aparajita (formerly Project Joyeeta) is a similar initiative running in Bangladesh, in partnership with CARE International, a development NGO. In 2009, 3 000 women sold Unilever products to 1.8 million households through sales hubs set up by CARE.

Project Hope in Vietnam

In Vietnam, through Project Hope we work in partnership with the Vietnam Women's Union to help improve life in rural areas. Job opportunities are created by inviting women to become part of our sales network. Unilever Vietnam provides women with extended credit, marketing, sales and accounting training and bicycles and other equipment. 300 women were recruited in 2009 in 12 provinces along the Mekong Delta.

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. Nearly 3 000 entrepreneurs, almost all women, reach 220 000 households.

A similar initiative also runs in the Philippines.