How can we scale distribution and sales networks that create opportunities at the BoP?

Expanding access to goods and services for the billions of people at the base of the pyramid (BoP) is not simply a growth opportunity – but a business necessity. However, reaching low-income markets often requires navigating fragmented - or in many cases, nonexistent - distribution and sales networks.

 

In recognition of this complexity and the challenges facing micro-enterprises in downstream value chains, a growing number of large companies are employing inclusive distribution network models that seek to empower low-income entrepreneurs and strengthen enterprises while helping companies increase sales and reach new markets. For the handful of these networks that have successfully reached scale, there are many more that have remained siloed CSR initiatives, morphed into non-profit entities, or simply faded away.

 

This online discussion is part of the Inclusive Distribution Challenge and coincides with the launch of a new discussion paper, which identifies three models of inclusive distribution and highlights eight emerging lessons on how to achieve scale. This online discussion aims to crowd-source more examples and input on business actions and partnerships and help prioritize Phase 2 of the Challenge focused on specific solutions to scale.

 

1. What are some examples of inclusive distribution networks, and how are they expanding opportunities at the BoP and creating value for businesses?

 

2. What are the most significant challenges to scale these models, and how do they vary across models, regions, and/or industries?

 

3. What are some emerging lessons and solutions on achieving scale, and where are there opportunities for more partnerships? 

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Hello! this is Juan, from Unilever. I work as Social Channels Manager for the Andean Region and Central America

Another example is in Bangladesh: Jita.  Jita began as a programme of Care - an NGO programme to provide livelihoods to marginalised women.  It spun off into a social enterprise, which has enabled its growth.  A network of thousands of women (aparajita's) sell a basket of goods door to door. The JITA sales network http://bit.ly/2hnqFDX

Well Solar Sister is one example. We are building a clean energy last mile distribution chain that is made up of women run businesses in Uganda, Nigeria and Tanzania. Women make up the majority of the rural energy poor market in sub-Saharan Africa so Solar Sister has responded with a women-centered supply chain to meet this demand. We have found that more often, women are able to find female customers due to community involvement and strong social networks. Also, women make the majority of energy decisions in their household so it makes sense to target them as the consumers then. 

Living Goods is a great example of using product mix that includes durable goods like cookstoves and healthcare in the same distribution channel

Caroline Ashley said:

What's interesting about Living Goods is that they have a distribution model for multiple beneficial goods.  Creating such networks is such a big ask that other companies want to use their network, not create their own. 

for more examples, we actually just published the publication on Inclusive Business for the Fast Moving Consuming Good Sector with IBAN from GIZ, and we address a whole section on distribution channels.. 

http://www.inclusivebusinesshub.org/wp-content/uploads/2016/11/IB_F...

some of the examples we address are from Danone in El Salvador; in Uganda, Kenya, Myanmar, and Zambia, Living Goods as you are mentioning... or the Project Shakti’, Hindustan Unilever (HUL) in India.. (page 30 of the report..) :-) 

Under SCALA we are supporting the scaling of 6 IDN models: three form corporations (Kiterias, Danone – World Vision Brazil; Plan Barrio, Nestle – ADOPEM; Shatki, Unilever –FUSAI) and three from social enterprises: Mercado Fresco – Supply Hope; Chakipi –Clinton Foundation, Red MANU-Nutrivida.   

Hello everyone, this is Mauro Homem from Danone Brazil. I´m the Head of Public Affairs and in charge of all the Social Innovation platform.

There are many interesting things about the Jita model, but one particular success factor is that it is operating in rural Muslim communities where women are limited in their freedom to shop and travel independently.  They are used to menfolk buying their saris in town.  So one of the things they really appreciate about the Jita model is being able to choose items for themselves, from a women seller at their own house.   Jita sells a mixture of more conventional consumer products (shoes, saris) and socially beneficial goods (nutritious foods).

Another Example may be the Program 4e Camino al Progresso (quoted in the paper) successfully strengthened SAB Miller’s distribution chain in Latin America, supporting 25’000 Mom and Pop shops across 6 countries of the region. Through training, on-site personal assistance and access to simple and low cost technologies, it enabled participating shopkeepers to increase their sales by 10% and their margins by 2% on average. With the financial participation of the FOMIN, the program also included a community development component, which consisted in training 4000 shopkeepers to leadership role in their communities, supporting them in implementing social impact initiatives. While SAB Miller can now count on more robust, sustainable, loyal and productive distributors, tens of thousands of households across Latin America are now better off.


Jessica Davis Pluess said:

Living Goods is a great example of using product mix that includes durable goods like cookstoves and healthcare in the same distribution channel

Caroline Ashley said:

What's interesting about Living Goods is that they have a distribution model for multiple beneficial goods.  Creating such networks is such a big ask that other companies want to use their network, not create their own. 

Welcome Juan! It would be great to learn more about how Unilever is engaging micro-entrepreneurs in their downstream value chain in Latin America?

Juan Céspedes said:

Hello! this is Juan, from Unilever. I work as Social Channels Manager for the Andean Region and Central America

There is also Hapinoy in the Philippines started by CARD MRI a large microfinance organization. Thousands of Sari sari shops have co-branded signage and products and benefit from support, access to credit and group puchasing.

Sari-sari Stores are small neighborhood retail shops started and run by women microentrepreneurs from their homes. Quite often these microentrepreneurs mothers – or Nanays – who engage in this microbusiness in order to augment their family’s income.

http://hapinoy.com/#home

There is a brief mention of Hapinoy in the discussion report.

Interesting! That sounds similar to what we are doing at Solar Sister. Rural last mile communities in areas like Tanzania typically do not have ease of access when it comes to purchasing solar lighting and cookstoves. So our women run businesses go door to door and visit the consumer directly (which also decreases travel costs and burden for consumer). We also work with multiple manufacturers and offer a wide portfolio of products so customers can have a choice based on their individuals needs and budgets. 

Caroline Ashley said:

There are many interesting things about the Jita model, but one particular success factor is that it is operating in rural Muslim communities where women are limited in their freedom to shop and travel independently.  They are used to menfolk buying their saris in town.  So one of the things they really appreciate about the Jita model is being able to choose items for themselves, from a women seller at their own house.   Jita sells a mixture of more conventional consumer products (shoes, saris) and socially beneficial goods (nutritious foods).

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