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Vistar - The Rural Initiative

The document discusses Havells' rural distribution model in India. It notes that rural areas contribute significantly to India's population, income, and FMCG expenditure. Havells has expanded its rural channel through programs like "Vistaar" which targets smaller towns through rural super stockists and distributors. The company's rural model aims for high inventory turnover and margins through a cash and carry system for stockists. Havells' vision is to have 3000 rural distributors, 90,000 retailer coverage, and generate Rs. 1000 crore in turnover through its rural expansion efforts.

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565 views14 pages

Vistar - The Rural Initiative

The document discusses Havells' rural distribution model in India. It notes that rural areas contribute significantly to India's population, income, and FMCG expenditure. Havells has expanded its rural channel through programs like "Vistaar" which targets smaller towns through rural super stockists and distributors. The company's rural model aims for high inventory turnover and margins through a cash and carry system for stockists. Havells' vision is to have 3000 rural distributors, 90,000 retailer coverage, and generate Rs. 1000 crore in turnover through its rural expansion efforts.

Uploaded by

PRAPTI TIWARI
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© © All Rights Reserved
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VISTAR

CLASSIFICATION | PUBLIC
Vistar
01 02 03 04 05 06 07

Rural Contribution Brands in Rural FMCG Model Our Model Product Basket ROI Our Vision

CLASSIFICATION | PUBLIC
Rural India Contributes

46% of Indian Expenditure


₹

70% of Indian Population 56% of Indian Income

CLASSIFICATION | PUBLIC
Major Brands in Rural

o FMCG Market Size- 2.5 lakh Crore


o Rural Contribution – 33%
o Rural Contribution to number of outlets- 64%
o Growth from 2012-2017 – 12-15%

o Philips Lighting started Semi Urban Operation in 2003


o Turnover in 2017 was 334crore with a growth of 9.4% over previous year.
o Contribution is 20% of Consumer Lighting Turnover
o Current Channel Strength – 113 SSTs & 2278 Sub Stockiests

CLASSIFICATION | PUBLIC
FMCG - Channel Model

01
Company

02 Distributor
Modern
Trade
Super
Stockiest

04 Retailers Retailers Stockiest

Retailers Retailers

03
CLASSIFICATION | PUBLIC
Havells - Current Channel Model

Havells – Galaxy Havells – Direct Dealers Havells – Distribution


*480 Galaxy across India *2779 Dealers *664+ Distributor

CLASSIFICATION | PUBLIC
Havells Tier Towns Specification

Tier 1 – Urban Towns Tier 3 – Rural 1.0


( Vistaar )
Population – 100k+
No. of Towns - 608 Population – 10k to 50k
Tier1 + No. of Towns – 2880
100k

Tier 2
– 100k
50k

Tier 2 – Semi Urban Tier 3 5 0k Tier 4 – Rural 2.0


10k –
Population – 50k to Population – Below 10k
100k No. of Towns – 664
No. of Towns – 603 No. of Villages – 600K +
Tier 4 w 1 0k
Belo

CLASSIFICATION | PUBLIC
Havells – Distribution Model

Havells

Class I Distributor
> 100 k 605 140

Class II Semi Urban


612 336
50 – 200 k Markets

Class III
20 – 49 k
1601 1402 Rural Channel
Rural Markets
Class IV 1356 1301
10 – 20 k

Class V 701 675


5 – 10 k Indirect
Reach
Class VI 232 619,795
<5k

POP Strata Towns* Villages

CLASSIFICATION | RESTRICTED
Havells – Distribution
Distribution Model Model

Urban Distribution Model Havells Rural Channel Model


Havells

Metro Trade Light


Distributor

Elec. O/l N.Elec. O/l

Trade Light Superstockist


Class I , II
Distributor

Elec. O/l N.Elec. O/l

Rural Distributor S1 S2 S3
Class III , IV
Elec. O/l N.Elec. O/l Elec. O/l N.Elec. O/l

Rural Retailers

CLASSIFICATION | RESTRICTED
Havells Expansion in Rural Market

Vistar
2800 Sub
Stockiest
100 Super
Stockiest
271 LASF
38 Rural
Specialist
Su ckie
St

pe st
o

Rural
Retailers Retailers Retailers Retailers Retailers
Distributor

CLASSIFICATION | PUBLIC
Havells – Channel

Galaxy

Direct Dealers

Distribution

“Vistaar”
Rural Channel

CLASSIFICATION | PUBLIC
ROI Rural
ROISuper
ModelStockiest
– Havells One

Parameters Plan • Payment terms Cash & Carry for Rural


Super Stockiests
• No Other Corporate Incentive
Super Stockiest Gross Margin 4.50%
• Low margins high rotations based ROI
Distribution Expenses 2.00%
model
Investment (In Days) 30
STOCKS (In Days) 30 • DMS billing must for SST
MARKET CREDIT 0 • Minimum 30 RDs/Towns for every SST

No. of Rotations 12

Net Margin 2.50%

ROI 30%

12
Havells Rural Product Basket
 First Company in India to enter Rural market with multi facet categories

Consumer Lighting Small Domestic Appliances

CLASSIFICATION | PUBLIC
Our Vision– Havells One
ROI Model

 3000 Rural Distributors

 90000 Retailer Coverage

 1000 Crore Turnover

14

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