Article Relevant to Session 2

Am posting an article which should ideally have been a session 2 reading but which I dropped owing to time-reasons.

P&G, Unilever search for rural entrepreneurs to attract lower-income consumers (ET, Sep 2111)

MUMBAI: If you are a global giant, you need to find some small fish to help you do business with other small fish - that is the new strategy adopted by consumer product multinationals Procter & Gamble and Unilever. The duo are hunting out, incubating and investing in small, rural entrepreneurs who can help them start selling to lower-income consumers in India and other emerging markets. MNCs have the money, brands and networks, but they need breakthrough ideas for new businesses. And they need to target the next set of customers as they face a downturn in developed markets.

P&G FutureWorks, the MNC's entrepreneurial engine that incubates start-ups around the world, is sending a team led by its head Nathan Estruth to Punjab next month. The subsidiary recently funded Indian start-up Healthpoint Services, a for-profit social enterprise that runs rural clinics providing potable water and affordable primary healthcare. It is also understood to be in touch with other start-ups in India in order to reach consumers through unconventional and innovative distribution models, a top company official said. More investments in start-ups are likely.

Unilever, which runs an in-house corporate venture capital fund since 2001, is finally zooming in on India and China. "We will strategically increase our investment activity in emerging markets," Martin Grieve, MD of Unilever Corporate Ventures, told ET. Unilever is looking to invest in early-stage companies in areas such as health and vitality, personal care, digital marketing and novel foods in India. "We are currently in discussions with a number of organisations," a Hindustan Unilever spokesperson added.

The FMCG biggies, true to form are leading the innovation charge on reaching out to the excluded bottom rungs. Wish them success. And here's more juice on what P&G is upto:

P&G, the maker of Tide detergent, Pantene shampoo and Gillette razors, hopes to leverage its alliance with Healthpoint to reach rural consumers who earn less than 100 (roughly $2) a day. Healthpoint offers 22,000 medical consultations and serves over 50,000 people daily with drinking water. Top officials close to the development said P&G is tapping the start-up's access to these consumers to test-launch some of its water, energy, health and beauty products. P&G markets Puro water purifiers through a non-profit model in some developing markets, and top officials say the brand is likely to be piloted in India soon.


"This is a business relationship where P&G provides investment and technical support and in turn learns about rural services markets by participating with us," said Dr Al Hammond, co-founder of Healthpoint Services India. "It is quite unique for a global corporation to partner with an early-stage social enterprise," he added.

A P&G spokesperson confirmed the partnership with Healthpoint, but declined to share any more details. P&G Futureworks is also understood to be in touch with other start-ups in India for reaching consumers through unconventional and innovative distribution models. "P&G will have to approach the market differently and seek such tie-ups to move faster," says Himani Singh, analyst at Elara Capital. "It has to tackle the lag factor in India in terms of competing with the massive market distribution network created by HUL."

Pls send in MKTR-relevant articles excerpted and highlighted. I'll be more than happy to post them on the blog.

Sudhir