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Cosmetics Industries Tapping Rural Opportunities
- 1. Cosmetics Industries Tapping Rural Opportunities Entrepreneurship Chanchal Jadhav PGDPCM II Roll.no. 1309
- 2. Introduction • Current population of more than 1.2 billion • The agro-sector has witnessed a slide in employment from 64 to 54% • Entrepreneurship can prove to be a gainful employment opportunity for our educated youth • Dr. MS Swaminathan, Chairman National Commission on Farmers suggested one of the solutions to the present crisis was the creation of more jobs in the non-farm sector
- 3. Need For Rural Entrepreneurship • Employment opportunities • Checking rural urban migration • Improve the per capital income of rural people • Controls concentration of industry in cities • Facilitates the development • Reduce poverty • Promote career
- 4. Unilever ( HUL) • Rural consumer markets in the developing world are an enormous • Due to different challenges many MNCs deter considering rural markets • Unilever has pioneered a number of innovations • Its focus is on addressing rural market opportunities
- 5. HUL’S Approach- Women to Sales • Tap women to power sales- Shakti initiative, HUL • As of 2015, the initiative had grown to 70,000 sales agents serving 165,000 Indian villages • In Pakistan, Unilever took the concept to a new level- Guddi Bajis, or “good sisters • Initiative also provides incomes for women who have few opportunities to make money and cannot freely travel
- 6. Grassroots distribution strategies • Small stores in Philippines called as ‘sari-sari’ sells as many as 200 different items • Account for 36% of country’s fast moving consumer goods sales • Distributing goods to this operation was complicated • Unilever recruited sub-distributors • As a result reduced the distribution cost in Philippines
- 7. Offer Services- Rural Consumers Need • ‘Blue Star’ on Thai Villages Shops- Resembled a store with star quality • Stores have Unilever Products as well as extra services and food corners • Platinum Store- To bring urban shopping experience to rural customers • Sales at Platinum stores expanded at a triple rate
- 8. Design Products For Rural Consumers • HUL pioneered use of low costs, single-use packets • HUL sells around 27 billion sachets a year • In Philippines, rural sales of Rexona’s deodorant increased in form of stick and roll on forms • Rexona penetration doubled to around 60%
- 9. Conclusion • Managers at HUL require to study village for a year • Countries in Asia and Africa Host 2/3rd world’s rural population hence markets there present a global opportunity • Penetration of technology is making rural consumers aware of product and services • Unilever cultivate an inclusive growth strategy that considers rural consumers as part of their plans for growth.
Editor's Notes
- From the 1960s onwards, India has had a population growth of around 23% per decade resulting with current population of more than 1.2 billion Also, the national employment pattern has undergone considerable change over the years. The agro-sector has witnessed a slide in employment from 64 to 54%, whereas opportunities in manufacturing and service sectors have gone up from 15 to 18% and 20 to 27%, respectively, which is a clear indication of the employment future of the country. For a country like India where unemployment is a major problem, entrepreneurship can prove to be a gainful employment opportunity for our educated youth Since, Today agriculture in general is not in good health Dr. MS Swaminathan, Chairman National Commission on Farmers suggested one of the solutions to the present crisis was the creation of more jobs in the non-farm sector
- The need for and growth of rural industries has become essential in a country like India because of the following reasons: Rural industries generate large-scale employment opportunities in the rural sector as most of the rural industries are labor intensive. 2. Rural industries are capable of checking rural urban migration by developing more and more rural industries. 3. Rural industries/entrepreneurship help to improve the per capital income of rural people thereby reduces the gaps and disparities in income of rural and urban people. 4. Rural entrepreneurship controls concentration of industry in cities and thereby promotes balanced regional growth in the economy. 5. Rural entrepreneurship facilitates the development of roads, street lighting, drinking water etc. in the rural sector due to their accessibility to the main market. 6. Rural entrepreneurship can reduce poverty, growth of slums, pollution in cities and ignorance of inhabitants. 7. Rural entrepreneurship creates an avenue for rural educated youth to promote it as a career
- 1. Rural Consumer markets in the developing world are an enormous but still-untapped opportunity for companies seeking new sources of growth. 2. By its sheer size, it has huge potential. Worldwide, there are 3.4 billion rural consumers and about 3 billion of them live in developing countries in Asia and Africa 3. The challenges – market development, product design, logistics, communication — deter many companies from even considering rural markets in developing countries 4. One of the standouts was Unilever. Particularly in Asia, Unilever has pioneered a number of innovations focusing on addressing on rural market opportunities
- With its Shakti initiative, Hindustan Unilever Limited (HUL) pioneered the concept of training local women as rural sales agents who sell Unilever products door to door in their communitie As of 2015, the initiative had grown to 70,000 sales agents serving 165,000 Indian villages, In Pakistan, Unilever took the concept to a new level, training hundreds of village women as beauticians, working out of their homes. During a three-month program, the women, called Guddi Bajis, or “good sisters,” learn to apply makeup, shampoo hair, and provide other beauty services, as well as how to sell Unilever products to their customers. They charge for their services and earn commissions on those sales.
- 1.The Philippines is a nation of small retailers. About 95% of the 1 million retail locations are small variety shops, called sari-sari stores. Despite their small size, some of the stores sell as many as 200 different items 2. they account for 36% of the country’s fast-moving consumer goods sales. 3. Distributing goods to these operations would be complicated and expensive 4. Thus Unilever landed on an idea: recruit some of the larger stores to do double duty as sub-distributors 7. This initiative had doubled Unilevers rural coverage in the Philippines while also reducing distribution costs
- The blue star on the sign outside a shop in a Thai village was more than a decoration. It signaled to customers that they would be entering a “store with star quality.” That means they’d not only find attractive displays and a wide assortment of Unilever products, but extra services such as community washing machines and “food corners” for breakfast or snacks. Unilever Thailand launched what it calls the Platinum store initiative to bring an urban shopping experience to rural customers – an alternative to typical rural stores with limited offerings Sales at Platinum stores were expanding at triple the rate of the channel overall
- HUL pioneered the use of low-cost, single-use packets to make its products affordable for lower-income consumers who often shop daily for necessities (think of a ketchup packet, but filled with soap) 2. In the Philippines, they turned out to be the answer to increasing rural sales of the company’s Rexona deodorant. Unilever faced a tough challenge: Only half of Filipinos buy deodorant regularly, and standard package sizes were too pricey for rural consumers. Then Unilever developed a cream version in a single-use-sized packet that cost about 10 cents. Rexona cream overtook the roll-on version as the product’s biggest seller
- Underlying HUL’s success in rural India is a program that requires managers to spend a month during their first year living in a village. They see how rural consumers live, and get a firsthand perspective on their needs and aspirations. That personal experience gives them insights that they could never gain from reading reports or conventional market visits.. countries in Asia and Africa host almost two-thirds of the world’s rural population. Because of government interventions, remittances from rural migrants, and works of NGOs and social organizations in developing better farming and sustainable living skills, these rural markets present a huge, global opportunity Accelerated penetration of mobile phones, internet, and satellite TV is making these rural consumers aware of the product and service options that they aspire to have for themselves and their families. Urban markets are becoming saturated – competition there is growing ever-more fierce. Forward-looking companies like Unilever cultivate an inclusive growth strategy that considers rural consumers as part of their plans for growth.