Africa’s consumer class is burgeoning, and Unilever’s “Project Shakti” is taking products directly to it. The ten-year-old initiative has expanded from India to Indonesia, Bangladesh, Sri Lanka and Vietnam, and is now reaching out to Nigeria and Kenya.
An efficient and proven business model, Project Shakti targets lower income households in rural markets.
Unilever already has $7.2 billion in annual sales in Africa with little penetration into rural markets, so the potential for growth is impressive. However, infrastructure is a problem. Unilever has to recruit sellers — whose cultures and demographics are very different than those of the original Indian Project Shakti participants — then provide micro-financing and products to them.
Other multinationals such as Nestle (NSRGY, quote) and Avon Products (AVP, quote) have worked around these impediments with a door-to-door, ground level approach. The Wall Street Journal has reported on the success of these efforts utilizing mobile phones for B2B and B2C protocols.
While Unilever is the second largest consumer products company in the world, growth is lagging in the United States and Europe. Emerging markets will be the engine for greater profits in the years ahead, and the company already has operations in 100 countries.