The Hindu Business Line : HLL's new distribution system to reach more consumers

FMCG major Hindustan Lever Ltd (HLL) on Tuesday unveiled plans of reinventing distribution so as to redefine current channels and look at creating new channels.

Clearly, competition was the main thrust for this change in its area of distribution as indicated by Mr M.S. Banga, Chairman, HLL, in his response to shareholders at the company's annual general meeting.

HLL, which has been reinventing its distribution system, in a bid to reach out to more consumers, will look at a three-way convergence of product availability, brand communication and brand experience. "We are building key capabilities in training the large number of people involved in these initiatives. Through all these initiatives we are getting our brands closer to the consumer," Mr Banga told shareholders.

These initiatives are expected to create employment and vocational opportunities through its nation-wide network of 7,000 stockists and 6,000 sub-stockists, thereby, employing over 60,000 people.

HLL is already involved in channels such as Project Shakti, which operates in 11 States; Hindustan Lever Network, which has a consultant base of 25,000 entrepreneurs; and out-of-home opportunity and health and beauty services.

"We need to go further in creating touch points for our brands relevant to the scale and nature of the Indian consumer opportunity. We are, thus, creating a whole set of new channels across all consumer segments in both urban and rural India," Mr Banga said.

At the AGM, he acknowledged that competition has prompted to act on the price front.

"Some of the price drops carried out by competition are not rational, they are below costs. We have given a fitting response by reducing prices of those products," he said.

Responding to shareholders' queries on the company's slowing growth rate, Mr Banga said the last three years were focussed on growing HLL's brands.

The Kodaikanal mercury contamination issue was raised by a number of shareholders, who were Greenpeace activists.

They said the company had not taken adequate measures on the clean-up and remediation of the factory site. Responding to these shareholders, Mr Banga said that various independent groups have assessed the damage and have found no damage to the environment in Kodaikanal.

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