HUL takes long view in rural India

12 August 2014

MUMBAI: Hindustan Unilever, the FMCG giant, is looking to exploit a five-year time lag in category development in rural areas versus urban with a programme of consumer education and innovative distribution methods.

Speaking at a rural marketing conference in Mumbai, reported by Campaign India, Ashish Rai, head, rural business and alliances, explained that Hindustan Unilever Ltd (HUL) was aiming to "develop categories ahead of anybody else in the top villages". In particular, he highlighted the opportunities for growth in low-penetration categories such as hand and face wash and fabric softener.

Rai emphasised that these would not develop overnight and that it could take two or three years of work to achieve results. That meant committing to ongoing market development, ranging from practical demonstrations of product benefits to persuading local opinion leaders to accept the brand. In addition, retailers had to be encouraged to continue stocking products during what would inevitably be a slow period.

HUL has also developed a network of 66,000 rural women - Shakti ammas -as part of its Shakti project, who act as "micro-distributors" of products in and around their villages.

"We have almost four million households and 25 crore people that we've reached through this channel," said Rai. "It is no more a CSR activity as it is almost part of our business and bringing in dividends and we are reaching those markets directly where our competitors reach through the wholesale route."

His views were echoed by George Angelo, executive sales director for Dabur India, another FMCG business, who pointed out that "brands play out very differently in the various socio-cultural regions across India" as categories are at different stages of development in the country.

And the importance of opinion leaders was evident in the need to listen to elders and conform to their views. That conformity, he said, could apply to very defined areas.

"It can … happen that there is a product that enjoys about 95% market share in a particular region, but if we were to travel, say, 80 km from that region we will find a completely different product enjoying similar market share."

Data sourced from Campaign India; additional content by Warc staff