Business Today

Bicycle chief

Anusha Subramanian | Print Edition: June 12, 2011

Baloo Bhegde, a resident of Bhegdewadi hamlet, 30 km west of Pune, knows what it is to juggle jobs to make a livelihood. Born into a farmer family, the 43 year old worked at the Rand Polyproducts' (a manufacturer of specialty polymer resins) factory near Pune, but found it tough to make time to till his two acre farmland.

So, a year ago he quit his job and took to full-time farming, growing rice, wheat and jowar. But after tending to his patch of land daily, he found he had hours to spare. Financially, his family of five was not stretched since his wife, Vandana, earned an income. As a Shakti Amma, a grassroots-level distributor for Hindustan Unilever, she made Rs 1,800-2,000 a month.

HUL's Project Shakti, launched in 2001, employs women self-help groups to sell its products. Now, as HUL makes a spirited push to expand and strengthen its reach in the hinterland, it has roped Bhegde in, too. He is a Shaktimaan, roped in for the next big leap the Anglo-Dutch multinational wants to make in India: distribute in villages with less than 2,000 people, which would be expensive to reach through its redistribution stockists.

Every day, Bhegde sets out on a bicycle provided by HUL to nearby hamlets to distribute popular brands like Wheel, Lifebuoy, Dove, Pond's and Brooke Bond. The consumers he caters to earlier had to travel to the nearest village where HUL had direct distribution. The extended reach means the Bhegdes sell products worth up to Rs 25,000 a month - and keep 10 per cent.

The Shaktimaan model, says Ajay Khanna, an HUL veteran of over nine years and now a consultant, is designed to offset steep distribution costs. In bigger villages, a van travelling to, say, five villages a day and notching up sales of up to Rs 30,000 is able to cover the cost of distribution. But, when sales are only Rs 10,000 even after covering 10 villages, the economics breaks down. "It is a trade-off between cost of distribution and revenue," says Khanna. HUL has some 20,000 Shaktimaans signed up, in addition to 45,000-plus Shakti Ammas.

HUL is looking to increase its rural reach three-fold: through a combination of distributors and Project Shakti. About six million stores in the country sell its products, of which just about a million are serviced by its own distributors or company salesmen (as of end-2009). HUL wants to alter this ratio dramatically.

"We drew up a plan to increase our coverage to two million stores within 24 months. This was our 'More Stores' agenda," says Hemant Bakshi, Executive Director, Sales and Customer Development. Since 2010, HUL has added 718,000 stores. It wants another 300,000 by 2011-end.

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