The project was started to explore the business opportunity of the rural market, where the competition will be less than the urban market. The first challenge faced by the Shakti was the low margin to its entrepreneurs and lack of owner ship. Its initial plan was, federations purchase products from HLL and then sell them to SHGs and then to outlets in village. In this model no one took responsibility. This challenge was overcome by changing the business model as follows: A member of the SHG appointed as entrepreneur, who borrow money from respective SHG and buy products directly from HLL.
By this model responsibility is only for entrepreneur and no need to share profit as well. HLLs pilot model was with women because they are the bulk consumer for the HLL products and they have access to home of potential consumers. Easy part of the project was the selection of the entrepreneurs. Problem starts once the stock started piling up, which was almost equal to their annual income. To add on to this, loan repayment schedule was also started which was threaten the feasibility of the project. These entrepreneurs did not have any previous experience in undertaking independent economic activity added up failure of this task.
HLL had overcome this with following initiatives: 1. They had introduced RSP, to control stock. To reduce the cost they hired the trainers to train entrepreneurs and outsourced the administration to third party 2. Offered incentive for visiting specific number of homes and offered additional incentive for selling specific brands 3. Negotiated with bank to get more time to start initial payment. To scale up the project, implementation team has to undergo following tasks: 1. Arrange government permissions and secure the support of the district administration 2.
Identify and seal partnerships with NGOs well established in the region 3. Interact with mainstream HLL sales to identify market for PS 4. Locate SHG and convince them that the project shakti was a reliable, sustainable source of income for their members 5. Appoint a right women as entrepreneurs 6. Ensure a steady supply of products In many placed HLL was not able get support from government, presuming that these attempts are an explosive attempt of a large multinational. This was overcome by the appointing MART and helped them to expand to 50405 villages across 310 districts in 12 states.
To scale up they have addressed the requirement of the small income group by introducing low price packs Introduced Vani programme to educate personals and communities on their health and hygiene. Next challenge faced was to change the focus of the buyers from local retailers to Shakti entrepreneur. It has been overcome by doing the following: 1. Personalized service 2. Door step delivery 3. Assurance of quality 4. Credit to regular patrons 5. Creating a network for sale and passing a percentage of the profit to them as well