HUL to taps rural India

Hindustan Unilever Ltd (HUL) has initiated discussions with prime telecom corporations and banks & monetary services corporations to make a joint distribution model to hide India's six.38 lakh villages within which some 775 million individuals reside. The maker of Lifebuoy soaps , Surf detergents and Dove shampoos plans to ride on the progress created by its different distribution channel referred to as Project Shakti to penetrate deeper into rural India in a very cost-effective manner. HUL, that hopes to own 1,000,000 shops by 2011-end, up from 5.50 lakh last year, has unveiled a blueprint titled 'Gateway to Rural: Beyond FMCG'. Says Hemant Bakshi, government director (sales & client development), HUL: "Since all folks are incurring high prices within the quest to travel rural, it is smart to partner and compute win-win deals." "HUL can play a key role to be an enabler in reaching these markets." HUL has initiated a pilot project with India's largest bank, the State Bank of India (SBI) in Maharashtra and Karnataka. HUL's Shakti Ammas, ladies who sell HUL's shopper merchandise in rural India, have doubled up as client service-providers and opened around one,000 accounts for rural people. If this exercise proves scalable, HUL plans to roll it out across the country over subsequent twelve months. Banks, that are being pushed by the regulator to become ambassadors of monetary inclusion, are grappling with a way to look beyond the traditional branch model to penetrate deeper in a very viable manner. HUL's Shakti model might facilitate banks take merchandise like insurance and mutual funds to non-urban of us. this might not be too totally different from what ITC's rural model for farmers, the ITC e-Choupal is trying, insurance corporations are reportedly keen on riding on the in depth network ITC's e-Choupals has designed with the farming community. The common strand that binds banks, mobile service-providers and fast-moving shopper merchandise corporations like HUL is that all of them have to be compelled to drive deeper into rural markets to stay the expansion coming back. Recently, as an example, SBI and Bharti Airtel entered into a joint venture to produce reasonable banking services to the unbanked. Airtel's 1.5 million retailers and distributors across India can play a key role in taking these services upcountry. It's such an exceptional reach of mobile service-providers that might have convinced HUL to start out talking with them (although Bharti Airtel might not be one amongst them). it's unclear at the instant whether or not HUL can kind separate rural distribution joint ventures as a business model or sign revenue-sharing agreements. Says Jagdeep Kapoor, chairman, Samsika selling Consultants: "HUL needn't reinvent the wheel when it will use the prevailing reach of alternative corporations in remote rural markets. Collaboration would be cost-effective in dashing up reach and lowering prices."