Avon’s Door-to-Door Model Adopted in Uganda
Thursday, July 28, 2011
Steve Chiotakis: Cosmetic-maker Avon releases earnings today. Analysts expect it to at least match profits from a year ago. In Uganda, a U.S. organization is using Avon’s door-to-door model to help consumers get the products they need, but often are unavailable to the — and this month that service is expanding.
The BBC’s Anna Cavell reports from Kampala, Uganda.
Anna Cavell: With a $75 loan, women in Uganda are being turned into entrepreneurs. Seven hundred of them have been hired by an organization called Living Goods to sell its health products door-to-door in their rural communities. A dose of medicine can cost just 20 cents to buy, but the transport costs to reach the store that sells it could be $2. And buying in bulk means these female entrepreneurs can get the products cheaply and cut out the travel costs for their customers.
Joe Speicher is the vice president of the San Francisco-based organization. He’s confident the business model will work because it was inspired by the success of an American household name.
Joe Speicher: Avon was founded in the 1860s in upstate New York, and the conditions there are very similar to the conditions that you would find today in sub-Saharan Africa: primarily social networks, underemployed women and low penetration of essential products.
Living Goods has what it calls a “double bottom line” — it aims to both make a profit and improve community health. But big businesses are also looking at the model with interest. Proctor and Gamble is already selling its products through Living Good’s saleswomen.
And this 19th century business model is being updated with 21st century technology. From this month, customers will start receiving targeted text messages on their mobile phones with information on discounts and promotions.