Two Decades of HUL’s Shakti
How HUL found a sweet spot in India’s rural market powered by the Shakti of Ammas
HUL’s website describes Project Shakti as a program that enables rural women in villages across India to nurture an entrepreneurial mindset and become financially independent. On the face of it, this may sound like a run-of-the-mill CSR project, but project Shakti has evolved into an important business channel for HUL in past few years. The strength of this channel was exhibited as the pandemic made its way to India, crippling supply chains and hurting the distribution abilities of almost all the companies. Piggybacking on the supply side structure created as part of project Shakti, HUL was able to somewhat wither this storm in the rural markets, more efficiently than some of its FMCG peers,
However, HUL’s resilience in the rural markets was not a doing of luck or an overnight success. It must be credited for its trailblazing vision for rural markets in India, and at a time when rural markets were not taken seriously by other major multinational FMCG companies. The fortune for companies in rural markets, which were ignored due to the perceived lack in their purchasing power seemed like a mirage back then. HUL, however, believed that these markets did have a significant collective purchasing power, though largely fragmented across millions of households. Further, the HUL leadership believed that it was the lack of awareness among the rural customers and not the aversion for branded products that was the real challenge for the companies.
HUL, however, believed that these markets did have a significant collective purchasing power, though largely fragmented across millions of households.
With a vision to harness the opportunity in the rural markets, HUL embarked on a journey that would soon become a case study across the world on penetrating rural markets. Project Shakti, which initially seemed to be a social project aimed at livelihood enhancement in villages by enrolling women as ‘Shakti Amma’, evolved into something more vibrant. The project catered to multiple stakeholders — HUL, Shakti Ammas, and rural consumers, at the same time. For HUL, this turned out to be a reliable channel that would lead category and brand penetration by increasing awareness and subsequent trials of HUL products by rural consumers. For the Shakti Ammas who were the core of this project, the project aimed at empowering them and turning them into micro-entrepreneurs. For the rural consumers, the project would offer branded alternatives to them, thus expanding the available choices.
Project Shakti was a well-conceived program that had the backing of the highest leadership and was supported by the organization with intent and resources. The project was launched in Andhra Pradesh’s Nalgonda district in 2001. HUL’s seriousness about the project was evident from the extensive training on product, distribution management, selling skills, and negotiation skills that Shakti Ammas were provided with, before commencing their work. The Shakti Ammas were expected to sell their stocks directly to the consumer or to the local retailers, and cover an area of approximately 3–4 km from their home location. This not only helped in covering larger areas but also ensured that the project could be scaled up without hurting the livelihood opportunities created for Shakti Ammas due to intense competition among themselves.
The project that was once seen as a CSR initiative soon turned out to be a significant source of revenue for HUL. It is also claimed that this channel alone helps in taking HUL products to almost four million households and 250 million people. Further, this extensive reach of HUL through Shakti Ammas, help in introducing newer categories to rural consumers faster than other competitors. Further, the personal selling approach adopted by Shakti Ammas means that huge chunks of ‘soft’ data are collected by Shakti Ammas due to their interaction with customers on areas like customer needs, product experience, and effectiveness of brand communication, among others. This helps HUL in strengthening its marketing mix.
Shakti Ammas were given extensive training on product, distribution management, selling skills, and negotiation skills before they could commence their work
Project Shakti has also proved its metal when it came to distribution agility. While it was historically believed that there are four to five years of gap in adoption of a product category between urban and rural audience, this gap is consistently reducing owing to rising exposure among the rural population, courtesy access to the internet and television. Thus, companies need a credible channel to make products available to rural audiences faster than how they did in past. Shakti Ammas with their established reputation, location proximity, and well-settled supply chain structure has proven to be effective in establishing distribution agility.
20 years after it was launched, project Shakti has done more than just being a catchy CSR subject for discussion. No doubt that the project has had significant social benefits for its 1.4 lac ‘Shakti Ammas’, and their families, but it has also been a game-changer for HUL in its last-mile distribution efforts. This was further reinforced during the Covid-19 pandemic, which helped HUL make its products available in the rural markets, despite major disruptions in the supply chain. If figures speak for themselves, then the success of Project Shakti can be understood by the fact that within 20 years of the first launch, Project Shakti is now functional in 18 states in India, covering more than 3.5 lac villages. That means reaching out to half of India’s seven lac villages!! Truly inspirational.
