Weekly Roundup: Uruguay smokes ‘Big Tobacco’, Safaricom ups the ante, critic pens a (RED) herring
Little Uruguay Smokes Big Tobacco
Uruguay has at last won its legal battle against a huge tobacco company and the victory will have wide-ranging implications concerning marketing, trademarks, international trade agreements and government health measures.
In 2010 Uruguay started requiring that an anti-smoking warning cover 80 percent of each cigarette package, front and back, and ruled there could be only one package design per tobacco company. Philip Morris International sued Uruguay – a small nation with a gross domestic product that’s actually dwarfed by Philip Morris’ sales. Well, score one for the little guy. The International Center for Settlement of Investment Disputes ruled that not only can Uruguay continue its anti-smoking marketing, Philip Morris has to pay Uruguay’s $7 million in accumulated legal costs.
Perhap the best news is that stop-smoking marketing works. Dr. Eduardo Bianco, who heads an anti-smoking group in Uruguay, told Bloomberg the number of smokers there “plunged since the crackdown began: from 32 percent of the adult population to 22 percent from 2006 to 2013” and promisingly predicted, “We are almost certainly going to be seeing other countries taking more aggressive measures to protect public health.”
We hope he’s correct and that African governments, in particular, are paying attention. From The Economist: “According to data collected by the World Health Organisation, smoking rates have increased in only 27 countries over the past 15 years; 17 are in Africa.”
A pick for contrarian view of the week comes from George Beall, a student at the Wharton School of the University of Pennsylvania, who penned “Adding Value: Why Social Entrepreneurship Does Not Exist” on Business.com. To support his thesis, Beall takes on Project (RED), Bono’s HIV/AIDS organization that’s part of The One Campaign. (RED) partners with a host of consumer companies to sell products and donate a portion to the Global Fund’s HIV/AIDs work in Africa. It also a has well-documented record of marketing hype over actual, lasting impact.
“(RED) products have seen more than $100 million spent on advertising while only raising about $18 million for the cause. Project (RED) has also gotten criticism for the amount of donations they spend on management expenses that will never actually go toward helping HIV/AIDS patients,” he writes.
(RED) incidentally, claims to have raised $350 million since its founding.
Nevertheless, we tend to agree with Beall’s overall assessment of (RED). To the extent any business model exists, it is a rickety corporate social responsibility platform that isn’t sustainable. Where we differ is in his definition of (RED) as a “venture.” It isn’t a business, nor is it a social enterprise. It’s not even a one-for-one model in the mode of a TOMS Shoes. As part of The One Campaign, (RED) is a 501 C3 charity.
When it comes to what is declared “social enterprise” it’s important not to paint with too broad a brush.
— One Acre Fund (@OneAcreFund) July 21, 2016
The Investing Bridge to the BOP
“When done badly,” Julie Sunderland wrote this week in OECD Insights, “social impact investment can distort markets and prop up unsustainable businesses.”
No, Sunderland was no responding to Beall’s critique. Rather, the director of Program-Related Investments at the Bill & Melinda Gates Foundation was making the case that impact investing can in fact be a “credible bridge” for the private sector to reach the base of the pyramid. Her post served as an intro to the “2016 OECD Development Co-operation Report: The Sustainable Development Goals as Business Opportunities.”
Sunderland notes that three uber challenges must first be tamed. These include aligning incentives for social and financial goals, changing the economics of reaching bottom-of-the-pyramid populations and cultivating top-tier, on-the-ground investment and entrepreneurial talent. On that last point, there’s been plenty of recent discussion on the talent crisis, and it’s important to see Sunderland add to it:
“Social impact investment needs to develop two levels of talent: strong intermediaries and fund managers who are good at allocating capital and building companies; and strong entrepreneurs and managers to lead social sector businesses.”
World’s Top Smartphone Brand Launches Mobile Money Platform in Brazil
Hardly a week goes by without the launch of a new mobile money service in emerging economies – but few involve brands that are familiar beyond these markets. This week, however, the world’s most popular smartphone brand rolled out a mobile payments platform in Brazil, as Samsung Pay launched there on Tuesday. This is the platform’s debut in South America, and the choice of Brazil makes sense. It’s Latin America’s largest mobile internet market, with roughly 90 percent of users owning smartphones, and Samsung dominates the market for the devices, accounting for almost 43 percent of smartphone sales. What’s more, the company reports that mobile banking usage there increased by 138 percent in 2015, with over 11 billion bank transactions made through smartphones. So far, much like its peers, Samsung Pay hasn’t been a runaway success in more developed markets like the U.S. But with the above advantages, plus partnerships with major financial institutions like Banco do Brasil, Caixa and Santander, it could be primed to buck that trend in Brazil.
— Toniic (@ToniicNetwork) July 18, 2016
SOCAP Update – SOCAP Open Sessions Announced
It’s hard to believe, but SOCAP16 is just eight weeks away. This week, the conference announced the sessions that were selected through SOCAP Open, the platform where conference attendees can propose ideas for their own panels. This year, organizers say, they received a record 250 proposals through the platform, of which 48 have been selected to be presented at SOCAP16 – along with almost 100 additional sessions curated by SOCAP’s content team. The panels tackle a vast array of issues relevant to the social business and investing space – you can check them out here for a preview of the conversation ahead. And if you’re planning to attend the conference, take note – ticket prices will be going up July 29, as their summer sale ends. (However, NextBillion readers can still get a $200 discount with this code: MP_NextBillion.)
Safaricom Ups the Ante in Battle with Banks
Safaricom, the parent company behind Kenya’s market-leading M-PESA mobile money platform, recently announced that it will complement this service with a debit card. The card will reportedly be linked with the platform’s Lipa na M-Pesa (pay with M-Pesa) service, which enables customers to make point-of-sale (POS) payments with their mobile phones across Kenya. It is currently in a pilot phase involving Safaricom staff, which will later be expanded to university students.
With the current option of paying with their phones, why would customers bother with a card? It boils down to convenience: When using M-PESA to make POS payments, customers must enter the till number, the amount due and their M-PESA PIN, then wait for the transaction to be finalized. The cards, which will employ Near Field Communication technology, promise to simplify this process, allowing people to pay simply by placing them near a POS terminal. But beyond customer convenience, Safaricom is clearly motivated by the numbers: Kenya’s payment cards industry tallies $13.5 billion in annual transactions, which represents a pretty penny in commissions that have traditionally gone to banks. On the heels of the Kenya Bankers Association’s announcement of a new mobile money platform aimed at challenging M-PESA’s dominance of the market, this move is the latest volley in a battle that shows no signs of abating.
— Adam Spence (@adamspence) July 22, 2016
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