August 30, 2011 5:01 pm

Unilever extends ‘Shakti’ scheme to Africa

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Unilever is transplanting its “Shakti” direct-to-consumer distribution scheme to Africa with one big difference: the vendor knocking on Nigerian village doors with sachets of shampoo and skin cream is as likely to be a man as a woman.

The move comes as multinationals tap into accelerating economic growth in Africa to sell shampoos, detergents and packaged foods to a population whose income is steadily rising. However, the dearth of formal retail networks – added to often ropey roads and railways – makes distribution tricky.

Unilever, the name behind Dove skin care and Flora margarine, is seeking to overcome this by replicating the model of employing tens of thousands of vendors that it developed in India in 2000.

The Shakti programme, which recruits women to sell to friends and family in remote villages, started in India with 17 “Ammas” (women) in two states and now boasts 45,000 women serving more than 3m households.

“We are kicking off the experiment as we speak in Nigeria and Kenya,” said Frank Braeken, who heads up the Anglo-Dutch conglomerate’s business in Africa, adding that it is at a very early stage.

In addition to the grittier issues of accessing remote villages and financing, he also reckons it will be tougher to recruit sufficient women, the backbone of the schemes in India and Indonesia.

“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 along the lines of the Shakti Ammas,” he says. Instead, Nigerian teams are more likely to be a combination of men and women.

Nestle, the world’s biggest food group by sales, already operates similar distribution networks in parts of Africa. It has 1,500 ice cream vendors in South Africa – who are provided with bikes, uniforms and even washing machines – as well as 5,500 individual vendors in the central part of west Africa.

A similar scheme gathering pace 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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