kashyap mart
TRANSCRIPT
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Pradeep KashyapCEO, MART
India
WISHH Midwest WorkshopOctober 15-17, 2007
Creat ing Sustainable LivelihoodModels for the Poor
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An Int roduct ion to MART
Established in 1993
Indias Leading Rural Consultancy Firm, workingboth in Corporate and Social sectors
40 professionals, offices in 4 states.
Research
Research Strategy
Strategy Pilot
Pilot Scale Up
Scale Up Training
Training
Our Services
Our Services
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The Hungry Market
Tier 5
Tier 4
Tier 2 3
Tier 1
Purchasing PowerParity In US Dollars
Population inMillions
>$20,000
>$15,00 - $20,000
$1,500
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Lower Income Populat ion-India: The Food Plate
Edible oil
1%Vegetable & fruit
18%
Milk,
Meat,
Egg &
Fish8%
Pulses &
Cereal
73%
Edible Oil
2%Vegetable &
Fruits
26%
Milk, Meat,
Egg & Fish
11%
Pulses &
Cereal61%
1983 2000
46%
46% 27%
27%Poverty Level
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Project Shakti
Co-created by Hindustan Unilever & MART
2000-2005
Womens Empowerment
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Hindustan Unilever
Hindustan Unilever Limited (HUL) is India'slargest fast moving consumer goods company
Has a wide range of Home & Personal Care
products and Foods & BeveragesCombined Turnover of $ 3.8 billion.
Home & Personal CarePersonal WashFabric WashHome CareOral CareSkin CareHair CareDeodorants & Talc'sColor Cosmetics
FoodsTeaCoffeeBranded StaplesCulinary ProductsIce CreamsModern Foods ranges
Project Shakti Women's Empowerment
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Source: Census of India, 2001
Population No of villages % of total villages
Less than 200 96,855 15.7
200 500 1,36,454 21.4
501 1000 1,56,737 24.6
1001 2000 1,40,751 22.0
2001 5000 87,206 13.7
5001 10000 20,363 3.2
Total no of villages 6,38,365 100.0
Dist r ibut ion of Villages
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Combined IDC Indirect Coverage5000+ pop villages
Shakti
1000 2000 pop villages
Streamline
2000 5000 pop villages
Accessibility
Turnover / market
Low
High
High
Low
HUL Rural Coverage Strategy
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Star Seller
Star Sellers take reach beyond motorable roads
Rural
Distributor(RD)
Coverage Process
Star Seller
Star Seller
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The Self Help Group (SHG)
10-15 women come togetherto form a self help group toinculcate small savings
Groups promoted by theGovernment or NGOs totackle poverty
Micro loans from rural bank
to setup enterprises Individual women take small
loans from the group to startincome generating activity
(petty vegetable vending,fish trading, tailoring, dairyetc)
2 million groups in existence today
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Concept
Unilever wanted to penetrate deeper to1,000 to 2,000 pop villages existingdistribution model unviable
Self Help Group women members werelooking for more sustainable businessopportunities in small village markets
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Process
Business concept explained to the group womenBusiness concept explained to the group women
Women get consent from family and husbandWomen get consent from family and husband
Entrepreneurial women selected and appointedEntrepreneurial women selected and appointed
Women trained on prices, discounts, buying, selling,brand communication etc
Women trained on prices, discounts, buying, selling,brand communication etc
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Doubles her household income
The principal customer of HUL is an individualwoman member from the group
She works as a HUL distributor and is known asa Shakti Entrepreneur
Receives stocks against cash payment at herdoorstep from the HUL rural distributor
Sells direct to consumers as well as to retailersin the village
Each Shakti Entrepreneur services 4-6 villagesin < 2000 population locations
Sells $300 - $500 per month; makes net profit of$25 - $35 per month (~7% average margin)
Shakt i - The Model
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Project Shakti Women's Empowerment
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Current Status of Sustainable Model
30,000 Shakti Entrepreneurs appointed
100,000 villages covered
10 million consumers serviced
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Condit ions for Replicat ion
Corporate should have a large basket ofproducts
Existing distribution reach up to nearby towns
Women groups should be present in largenumber of villages
Stability of micro finance in groups
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Collect ive Market ing
A MART Initiative
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Background Small & Marginal Farmers
Small landholding, < 2 hectares (80%)
Marketing challenges
Limited marketable surplus
Dependency on local intermediaries
Lack of value addition
Lack of market information
Lack of access to terminal market and organisedprivate players
Lack of access to formal finance
Reach of organized private retail chains minimal
Collective Marketing
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Raw Produce
Raw Produce
Minimum ValueAddition
SemiFinished
Finished
Town / City
Town
Village
The Product Pyramid
Collective Marketing
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10 15 %10 15 %
5 -10%5 -10%
5%5%
5%5%
Group WorkingCapital Loan
Group WorkingCapital Loan
Value Chain
Distant MarketDistant Market
Nearby MarketNearby Market
Local Value AddProcessing
Local Value AddProcessing
CollectivizationCollectivization
Raw ProduceRaw Produce
Collective Marketing
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MART Solut ion
A market led approach to sustainable livelihoodpromotion
Empower the small farmer through collectivization to
achieve economies of scale and better negotiate themarket
Link farmers to mainstream market
Focus on public-private-community-partnership
Facilitate and build capacity of farmers - but not getinvolved in buying and selling
Demonstrate scalability
Maximize return to farmer with minimum additionalinvestment
Collective Marketing
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Particulars Started in Expanded to
Districts 2 6
Coverage (districts) Balangir, Nuapada + Kalahandi, Koraput, Gajpati,Kandhamal
No of Villages 20 400
No of SHG members 200 1500
Turn over (US$) 12000 1,20,000
Products Minor Millets, Cotton,
Onion, Madhuca indica,Buchania Langan
Vegetables, Niger, Cow pea,
Cashew, Tamarind
I nit iated in most backw ard Dist rict s of Orissa
Coverage
Collective Marketing
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Approach to Collective Marketing
Map produce having marketable surplusMap produce having marketable surplus
GroupOrientation
Concept SharingCapacity build
Systems in placeBusiness plan
Financial linkageProcurement
GroupOrientation
Concept SharingCapacity build
Systems in placeBusiness plan
Financial linkageProcurement
Market Infrastructure
Dryingplatform
WeighingScale
Logistics Quality check
Market Infrastructure
Dryingplatform
WeighingScale
LogisticsQuality check
MarketLinkage
Search market Negotiate withtrader
Linkage
Profit sharing
MarketLinkage
Search marketNegotiate withtrader
Linkage
Profit sharing
Planning for the next producePlanning for the next produce
Collective Marketing
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Collective Marketing
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Overall Benefits of Intervent ion
Higher value for produceHigher value for produce
Better negotiating power in marketBetter negotiating power in market
Better understanding of market dynamicsBetter understanding of market dynamics
Marketing infrastructure createdMarketing infrastructure created
Collective Marketing
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Thank You!