Commercial Alliances

Background

Healthcare indicators in India exhibit significant gaps across urban and rural areas. For example, in Uttar Pradesh the contraceptive prevalence rate (CPR) in the urban and rural areas is 56% and 40% respectively1. At the same time, rural India presents a huge untapped market of over 750 million people.

Hindustan Unilever Ltd. (HUL) is the Indian subsidiary of the multinational company Unilever, whose nutrition, hygiene and personal care products and brands are widely recognized worldwide. Recognizing the potential of this untapped market, HUL launched Project Shakti in 2001. This Base of the Pyramid initiative is comprised of rural women, or Shakti Entrepreneurs (SE), who sell HUL products such as soap, toothpaste, and detergent, in their villages and nearby communities for a profit. As of now there are more than 40,000 SEs covering over 100,000 villages throughout India. Members of the Shakti network penetrate and reach out to some of the most unfrequented corners of rural India. HUL envisions the creation of 100,000 SEs covering 500,000 villages, and touching the lives of 600 million rural people by the year 2010.

Project Shakti creates income-generating capabilities for underprivileged rural women, by providing a sustainable micro enterprise opportunity, and improves rural living standards through health and hygiene awareness. A typical SE conducts a steady business which gives her an income in excess of Rs.1,000 per month on a sustainable basis. As most of the SEs are women from households below the poverty line, and hail from extremely small villages (with populations of less than 2,000), this earning is very significant, and almost twice the amount of their previous household income. The most crucial aspect Project Shakti is that it is a profitable channel for HUL and is thus proven to be commercially viable and fully self-sustaining.

Activity

Appreciating the potential of this large-scale, fully sustainable rural distribution system, the Abt Associates led-PSP-One project proposed to HUL the idea of adding health products to the Shakti network to further improve health outcomes in rural India. PSP-One and HUL are now collaborating on this health at the Base of the Pyramid effort, or Shakti h@BoP. As part of this collaboration, PSP-One is assisting HUL in the development of a strategy to design pilot interventions to be implemented in three districts in the state Uttar Pradesh, focusing on two key maternal and child health areas:

  • Family Planning – birth spacing
  • Child Health – diarrhea

The health products for family planning may include condoms and oral contraceptives (OC), and for child health oral rehydration salts (ORS) for diarrhea. This may be expanded subsequently. The main components of the pilot interventions will be:

  • Partnerships with manufacturers of the health products (such as condoms and ORS) to be introduced through Shakti
  • Training of the Shakti Entrepreneurs on use and promotion of the health products
  • Market-building activities to promote and increase use of the health products
  • Linkages with local NGOs and/or health facilities for referral
  • Monitoring and evaluation of health impact on the communities and financial and social impact on Shakti Entrepreneurs

PSP-One’s main role in this collaboration is to broker partnerships with the manufacturers, provide technical assistance in the pilot design, training of SEs and market-building activities, and monitor and evaluate the pilots. All pilot implementation costs, including the market building activities, will be covered by HUL and the manufacturing partners.

Different from the currently prevailing healthcare delivery mechanisms in rural India, which usually rely on free, and subsidized/socially marketed products, the Shakti health products will be 100% commercial but appropriately priced for rural markets. The Shakti h@BoP pilot is attempting to create a fully commercial and self-sustaining model for delivering health products in hard to access rural areas. If the pilots are proven successful, HUL plans to gradually scale them up to the entire Shakti network, reaching a remarkable size of the rural Indian population with an affordable and sustainable supply of health products, without any further donor or government investment.

PSP-One Technical Area Leader: Denise Averbug, PSP-One Commercial Alliances
1. India National Family Health Survey 3, 2005-06 (NFHS-3)

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