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Changing lives in rural India

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Rationale

The private sector can contribute to socialdevelopment even if governed by business objectives

Developmental initiatives from the private sector willbe sustainable and scalable only if they make

business sense

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Unilever in India

Unilever has been in India since 1895

Hindustan Lever formally incorporated in 1956 A subsidiary of Unilever (51.5%)

Most sought after recruiter among Indias B schools

Source of employment 15,000 permanent employees

200,000 indirect jobs

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Hindustan Lever Limited

A$

2.

2billion company

16% operating margin

Market Capitalization: $14 billion

Market Leader across categories

Fabric wash, Personal wash, Dish wash, hair wash, skinapplications, Talcum powders, packet tea, Jams

Number two: Toothpaste, instant coffee, ketchup

23 of Indias 150 most trusted brands

9 in top 20

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The sales and distribution challenge

Seven million distinct outlets one for every 29 households

59% of these stores are in rural India

Organized modern retail formats very nascent Multinational presence restricted by government

Unilever directly services over 1 million stores

A network of over 7000 stockists and distributors

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Unilever: Sales & Distribution in India

Modern Trade

Organized retail

Self-service stores

General Trade

Wholesale

Family grocer

Marginal retail

Rural Trade

Multi-purposeretail

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Rural India - challenge and opportunity

775 million Indians in 6

38,000 Indian villages

1 in 8 people on this planet is an Indian villager

4 million distinct outlets

A different life

44% of urban per capita income Low literacy, media reach: 624 million people lack access to TV

30 million homes remain under the poverty line

A case for business

52% of domestic product, 60% of consumption expenditure Share of agriculture less than 50% of the rural economy

50% decline in poor households, doubling of mid-income homes

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Rural India - challenge and opportunity

775 million Indians in 6

38,000 Indian villages

1 in 8 people on this planet is an Indian villager

4 million distinct outlets

A different life

44% of urban per capita income Low literacy, media reach: 624 million people lack access to TV

30 million homes remain under the poverty line

A case for business

52% of domestic product, 60% of consumption expenditure Share of agriculture less than 50% of the rural economy

50% decline in poor households, doubling of mid-income homes

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#1:

Reach

Reaching

marketsReaching

consumersand

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Accessibility

Streamline

Turnover per market

IndirectCoverage

DirectCoverage

HLLs approach to rural distribution

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Direct coverage

Factory DepotStockist /Distributor

Trade

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Village 1

Village 2

Village 3

Village 4

Village 5

Stockist

Indirect Coverage

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Star seller

Star seller

DistributorStar seller

Streamline

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Direct reach: 16% of villages

HLLs approach to rural distribution

Accessibility

Streamline

Turnover per market

IndirectCoverage

DirectCoverage

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Women in Rural India

Population:

361 million

946 per 1000 vs. 901 in urban

Greater involvement in work force 31% of rural women, vs. 11% in urban

Indias women earn $ 1,569 per capita, men $ 4,130 (PPP)

Access to education Literacy Total Urban RuralAll 65.2 80.1 59.2

Male 75.6 86.4 71.2

Female 54.0 73.0 46.6

Indias most marginalized group

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The self-help group Grameen Bank: mutual thrift societies of village women

A rapidly spreading movement: 6 million groups in India

70% of rural households in AP

A micro-finance revolution 8 million families have received micro-credit

76% of micro-credit recipients have crossed the poverty line

95% of micro-credit recipients are women

Effectiveness depends on opportunities for micro-enterprise

The role of micro-finance

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Low

Income

Low

SavingsLow

Investment

The role of micro-finance

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Income

SavingsInvestment

Micro-Enterprise

Micro-Credit

+

The role of micro-finance

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Micro-enterprise opportunity

Underprivileged rural women are appointed as ShaktiEntrepreneurs and trained to manage micro-businesses

Average earnings per entrepreneur: $16 per month doubling monthly household income

supplementing other income

Piloted in 2001, scaled up rapidly Now a network of 25,000 entrepreneurs in fifteen states

The Shakti Entrepreneur program

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Impact

Anetwork of local, credible brand endorsers, reaching100 million people

Market growth and brand equity significant increase in penetration and market shares

15% of HLLs rural business in districts of operation

Deterrent to counterfeits counterfeit industry is 10-15% of total

Unique direct to consumer channel Contact with two million rural homes every month

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#2:Communicate

andSearching for amedium

Achieving

Interaction

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Shakti Vani

Social communication anchored on brands health and hygiene

womens empowerment

Village women are recruited as Vanis and trained tocommunicate

Vani audience: key opinion leaders, schools, SHG meetings,other village gatherings

Specially designed communication material easy-to-carry kit: flip-charts, leave-behind posters, banners

content developed after in-depth understanding of local context

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H

and-wash demo in schools

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#3:Influence

andAchieving

contactImpacting

Behavior

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Shakti Activities

Free Health Camps in Shakti Village

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Free Dental Camps in Shakti Villages

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iShakti

Rural community portal that creates access toinformation

Villagers can register as users and surf content areas: Agriculture, health, veterinary services, education,

employment opportunities, education, personal grooming,entertainment, games

All content backed by local language voice-over

On all content areas, users can pose queries

1,000 kiosks in AP, partnership with government

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Vision 2010

100,000Entrepreneurs

500,000villages

600millionConsumers

Shakti shall reach everyhome in every

village, create sustainable livelihoodopportunities, and enhance the

quality of life in rural India