Kashyap MART

download Kashyap MART

of 26

Transcript of Kashyap MART

  • 8/2/2019 Kashyap MART

    1/26

    Pradeep KashyapCEO, MART

    India

    WISHH Midwest WorkshopOctober 15-17, 2007

    Creat ing Sustainable LivelihoodModels for the Poor

  • 8/2/2019 Kashyap MART

    2/26

    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

  • 8/2/2019 Kashyap MART

    3/26

    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

  • 8/2/2019 Kashyap MART

    4/26

    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

  • 8/2/2019 Kashyap MART

    5/26

    Project Shakti

    Co-created by Hindustan Unilever & MART

    2000-2005

    Womens Empowerment

  • 8/2/2019 Kashyap MART

    6/26

    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

  • 8/2/2019 Kashyap MART

    7/26

    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

    Project Shakti Women's Empowerment

  • 8/2/2019 Kashyap MART

    8/26

    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

    Project Shakti Women's Empowerment

  • 8/2/2019 Kashyap MART

    9/26

    Star Seller

    Star Sellers take reach beyond motorable roads

    Rural

    Distributor(RD)

    Coverage Process

    Star Seller

    Star Seller

    Project Shakti Women's Empowerment

  • 8/2/2019 Kashyap MART

    10/26

    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

    Project Shakti Women's Empowerment

  • 8/2/2019 Kashyap MART

    11/26

    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

    Project Shakti Women's Empowerment

  • 8/2/2019 Kashyap MART

    12/26

    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

    Project Shakti Women's Empowerment

  • 8/2/2019 Kashyap MART

    13/26

    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

    Project Shakti Women's Empowerment

  • 8/2/2019 Kashyap MART

    14/26

    Project Shakti Women's Empowerment

  • 8/2/2019 Kashyap MART

    15/26

    Current Status of Sustainable Model

    30,000 Shakti Entrepreneurs appointed

    100,000 villages covered

    10 million consumers serviced

    Project Shakti Women's Empowerment

  • 8/2/2019 Kashyap MART

    16/26

    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

    Project Shakti Women's Empowerment

  • 8/2/2019 Kashyap MART

    17/26

    Collect ive Market ing

    A MART Initiative

  • 8/2/2019 Kashyap MART

    18/26

    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

  • 8/2/2019 Kashyap MART

    19/26

    Raw Produce

    Raw Produce

    Minimum ValueAddition

    SemiFinished

    Finished

    Town / City

    Town

    Village

    The Product Pyramid

    Collective Marketing

  • 8/2/2019 Kashyap MART

    20/26

    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

  • 8/2/2019 Kashyap MART

    21/26

    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

  • 8/2/2019 Kashyap MART

    22/26

    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

  • 8/2/2019 Kashyap MART

    23/26

    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

  • 8/2/2019 Kashyap MART

    24/26

    Collective Marketing

  • 8/2/2019 Kashyap MART

    25/26

    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

  • 8/2/2019 Kashyap MART

    26/26

    Thank You!