Wednesday, 27 March 2013

Unilever calling in on Africa

Project Shakti is unleashing the potential of rural India. Unilever is now kicking off the experiment in Nigeria and Kenya.

Project Shakti is unleashing the potential of rural India. Unilever is now kicki

Consumers throughout the western world are used to those famous two words ... "Avon calling". Now the people of Africa will be exposed to the same selling technique, but instead of just cosmetics it will be shampoos, cleaning fluids and detergents they can buy – courtesy of multinational giant Unilever.

The first countries to benefit from the company's direct to consumer distribution scheme – known as shakti – which has already been a huge hit in India, will be Nigeria and Kenya.

And another major difference from Avon is that the army of Shakti vendors in Africa won’t comprise solely of women, as men are being recruited too.

Unilever’s move into shakti comes on the back of increased disposable income in India and certain parts of Africa, but where distribution is made difficult by poor road and rail networks.

“We are kicking off the experiment as we speak in Nigeria and Kenya,” said Frank Braeken, head of the Anglo-Dutch conglomerate’ in Africa.

“Women work full-time in Africa; they are the ones who really carry the agricultural economy. The men decide on the crop to plant and the women do the work. So that can make it more challenging for us to hire women,” he says.

Nigerian teams are more likely to be a combination of men and women.

Unilever, producers of Dove skin care and Flora margarine, are developing the model of employing tens of thousands of vendors that it started in India in 2000.

There, the Shakti programme employed women to sell to friends and family in remote villages. It began with just 17 women in two states but now has 45,000 women serving more than 3m households.

In Africa, though, Frank Braeken believes it will be tougher to recruit sufficient women.
Nestle already runs similar schemes in parts of Africa. It has over a thousand ice cream vendors in South Africa – who are given bikes, uniforms and even washing machines – as well as 5,500 individual vendors in the central part of west Africa.

A similar scheme in the Democratic Republic of Congo is targeting 100 first-time women entrepreneurs selling Nestle products in the streets of Kinshasa by the end of the year.

Unilever provides microfinance for its vendors and Mr Braeken sees this as a potential difficulty in Africa where banking infrastructure is less well-established than in India.

While the Shakti programme allows Unilever to distribute its products to far-flung places it could not otherwise reach, the conglomerate points out that it also provides a livelihood for people – especially women – who might otherwise struggle to find work. Instead, the scheme allows them to make a monthly profit of $15-$22, Unilever says.

Unilever generates annual sales of more than €5bn ($7.2bn) in Africa.

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