Reducing discovery costs and leveraging excess capacity to implement a commercially viable rural distribution model for Oral Rehydration Salts (ORS)

In India, 500,000 children under five die annually from diarrhea and its complications. ORS is an effective intervention for diarrhea. Caregivers in rural areas cited lack of access to ORS as a deterrent to use. High cost of reaching rural areas, low expectations of returns and focus on urban markets have led to insignificant private sector presence in rural markets. A distribution model to ensure rural supply of ORS was piloted in Jul'10. This is a partnership between the Shakti network of HUL, India's largest consumer goods company and PS, a small-scale ORS manufacturer. Shakti is a network of rural retailers selling HUL products like soap and detergent. PS is unique because 70% of its sales are generated from peri-urban markets. It has, for this pilot, reformatted the sales infrastructure to supply ORS to Shakti retailers during high incidence months. Shakti reduces discovery costs for PS by allowing access to micro-level retailer information hence facilitating identification of high potential outlets. A next-level filter is outlet distance from nearest PS peri-urban center, optimizing revenues from each route. A mobile payment system monitors supply and closure of sales loop. Results: PS returns on operating costs 32%. Program MIS, PS sales, cost data demonstrate for the first time that it is commercially viable to service rural markets with ORS and other seasonal public health products. The private sector needs to innovatively leverage existing operations to sustainably cater to rural audiences. Granular retailer-focused data can facilitate a commercially viable supply of public health products.