NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, August 14, 2012

Lipstick may be the newest weapon in the fight against global poverty. A recent study (PDF) by University of Oxford researchers suggests that selling Avon (AVP) cosmetics have helped women in South Africa become financially independent. Other businesses are mimicking Avon’s model of direct sales as a way to alleviate poverty in developing countries.

Oxford business school professors Linda Scott and Catherine Dolan spent three years surveying poor black women who worked as Avon representatives in South Africa and found that nearly three-quarters made their primary income through the company, which sold more than $11 billion in cosmetics worldwide in 2011. Of the 300 women surveyed from 2007 to 2010, those who sold Avon goods for at least 16 months made enough money to purchase necessary “survival” goods on a monthly basis for their families. The earnings placed the South African “Avon ladies” in the top 10 percent of self-employed black women.

The researchers called the women’s enthusiasm for Avon “lipstick evangelism.” Many women told traumatic stories about their lives before Avon and discussed the drastic improvements they enjoyed after becoming representatives. “The most important thing about this is that it’s not some joke about lipstick,” Scott says. Direct sales “is helping more than some of the other things being done, like microfinance,” she says.