Micro distribution is an emerging concept for servicing very small retail outlets, restaurants, kiosks, roadside vendors etc. Its difficult to reach such tiny retailers through normal distribution channel that companies operate. The problem takes far larger dimension in rural markets where reaching very small outlets like tiny shops, dhabas, rural kiosks etc. through traditional distribution is expensive and indeed a logistics challenge. To solve this problem – companies are tapping into entrepreneurial spirits of individuals and small businesses who are trained and given responsibility to serve very small retail outlets in their adjoining areas through bicycle, pushcart, two-wheeler etc.
Micro distribution is specially relevant for emerging and developing markets where retail channels are highly fragmented and unorganized. In the absence of retail chains and consolidation – very small retail outlets emerge to serve immediate local market in congested urban areas as well as in far flung rural markets. As reaching these micro outlets through traditional distribution channel becomes financially non viable because of small orders, irregular supply, logistics channel etc. – companies are increasingly taking recourse of micro distribution model.
Examples of micro distribution models are – Project Shakti of Hindustan Uni Lever (HUL) in India and Coco Cola’s micro distribution network in African rural markets.
HUL has trained thousands of women in villages across India to develop an entrepreneurial mindset and make them financially independent. These women entrepreneurs (called Shakti Ammas) have been trained on basic tenets of distribution management and familiarization with the Company’s products. HUL has a team of rural sales promoters (RSP’s) who coach and help Shakti Ammas in managing their business. This includes help in business basics and troubleshooting as well as coaching in softer skills of negotiation and communication which enable them to run their business effectively. Project Shakti now has over one lakh micro-entrepreneurs across 18 states.
For more information on Coca Cola’s Micro Distribution Network in Australia –