Post on 09-Apr-2018
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Restricted - Confidential Information
GSM Association 2010
All GSMA meetings are conducted in full compliance with the GSMAs anti-trust compliance policy
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GSM Association 2010
Three main actor are involved in the development of a
network of women direct sales agents
Multinational corporation:
train women to become representatives
sometimes provide microfinance so that women can afford products stock at the
outset
Women self help group: Selects women with entrepreneurial potential
Provide locations for company presentations and training
Microfinance institution:
Needed when corporations do not provide microfinance lending
Needed when women need to invest in assets additional to product initial stock
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Direct selling appears to be an effective distribution channel
in emerging markets
Direct selling particularly works in emerging markets for several reasons:
it builds on traditional trading arrangements and already existing web of social ties
(i.e. relatives, friends, and neighbours)
the success of a direct seller greatly depends on her networking skills rather than
her literacy and educational levels it resonate particularly well in contexts were capital and income generating
opportunities are scarce
cost of entry and the risk of participation in a direct selling network are quite low
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Women have great potentials as direct sales agents and can
greatly benefit from being involved in such initiatives
Women have emerged as the main actors of these initiatives for several
reasons:
most products marketed through these approach (i.e. cleaning products,
cosmetics, kitchenware) are purchased and used by women
in many societies women have always played a major role in selling a wide varietyof products from handcrafts to vegetables and fruits
it is well established that investing in women is the most efficient way to improve
not only household welfare, but the social and fiscal health of nations
Womens participation in direct sales networks improves their:
income
confidence
self-esteem
autonomy
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Entrepreneurship activities can play a crucial role in the
empowerment of women in the developing world
Two factors are crucial to womens empowerment:
Resources: income, education, land, etc..
Agency: ability to control resources and make strategic choices on how to use
them in a context where this ability was previously denied
In many emerging countries women empowerment is hindered by:
barriers to access resources
restrictive socio-cultural norms and gender based discriminations that hinder
women agency ability
These initiatives encourage women to invest in resources - facilitating access
to capital and training - and give them the opportunity to learn how to make
strategic decisions on how to use them
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MNOs products can easily be distributed through this
channel
MNOs products such as SIM cards and airtime cards are:
easier to sell than other goods such as food products (not perishable)
are available and demanded by consumer regardless of the season
take up little space and do not require the seller to have access to other assets
convey a more sophisticated status and confer a more upscale reputation thanconventional form of petty trade
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Designing direct sales networks that favour women
empowerment
The way companies design their network of direct sales agents have major
impacts on:
Inclusion of poorer women
low cost of entry and facilitate access to microfinance
Potential for learning opportunities and personal development team building and financial literacy training
provide incentive to play an active role in recruiting and training new agents
Potential for women empowerment
encourage women to identify their life goals and to channel their efforts so as to
reach them give women a new view of the possibilities and opportunities before them
connects women with realities beyond their immediate context
reinforce their identity as entrepreneurs
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Poorer women should find possible to become agents
Initiatives that can favour the inclusion of poorer women include:
allow new sales agents to start with a limited stock of products
provide sales agents with a small amount of credit
facilitate access to credit from microfinance institutions
allow initial small orders and facilitate the conversion of the profits from thesesmall sales into subsequently larger orders
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Opportunities for learning and personal development should
be frequent
Initiatives that can provide learning opportunities and personal developments
include:
train women on financial literacy, negotiation and team building skills
give incentives to women to recruit and mentor new agents
provide commissions also on the sales of agents recruited and mentored by senioragents
post a credit history of the direct seller so as to enabling women to build the credit
rating necessary to start other small-scale entrepreneurial ventures
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The ultimate goal of these initiatives should be women
empowerment
Initiatives that can favour women empowerment include:
favour a stable income stream so as to provides women with some freedom from
patriarchal authority and gives them greater authority in their households
provide incentives which serve as milestone for individual achievements
give women a new view of the possibilities before them encourage women to identify their life goals, and teach them how to channel their
effort and how to plan financially to achieve them
define motivational events, inspirational materials, reward systems and mentoring
process that inspire women to realise their personal ambitions and reinforce their
identity as entrepreneurs
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Potential drawbacks must be assessed
Potential drawbacks include:
direct sellers can become squeezed between buyers and the company if payment
are delayed and are not forthcoming
direct sellers confront ubiquitous pressures to sell, recruit new sellers, and reach
sales targets
Risk of women becoming target of assaults as travel with cash/large stock of
products
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Recommendations forMNOs
Phase 1:
- Identify areas for pilots and women self help groups to partner with
- Identify retailers in nearby cities that can act as point of contact for women
agents
- MNOs can partner with women self help groups in selecting women withentrepreneurial potential
- Self help groups can train women in basic business skills and basic literacy so
as to be able to act as sales agent
- MNOs can train women so as to introduce them to the logics of tariff plan
characteristics, SIM card activation, provision of airtime, etc..- Microfinance institution would have a marginal role since the initial investment
that women do to buy Sim cards can easily be financed by MNO/self help group
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Recommendations forMNOs
Phase 2
- MNOs will provide women agents with an handset for their own use and a
certain amount of SIM cards
- Women will only need to physically have SIM cards as airtime can be sold to
end customers through apps (see Mobile prepaid business for BOP womenin the Apps challenge)
- Women can easily use mobile banking to give back to the retailers the cash
collected by customers
Further benefit forMNOs
- Generating sales will be the main task of women agents but they will also beinvaluable point of contact with BOP consumers and their insights could be
used as inputs for dedicated tariff plans and VAS
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Next steps
Define economics of the system:
Define the margin a women agents get on SIM card activation and airtime selling
Define the average income a women agent need to be in business
Define sales volume that would justify MNOs investments
Sizing the potential addressable market a women agent need to serve to be inbusiness
.....
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Women as direct sales force - Case studies
Hindustan Liver Project Shakti India
Royal Philips Electronics India Tupperware Brand Corporation India
Avon South Africa
Belcorp Latin America
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Hindustan Liver Project Shakti - India
The products:
FMCG (i.e. washing powder, toothpaste, shampoo, etc..)
The challenge:
reach the 500.000 villages with smaller populations in more remote parts of the
country, where there are millions of potential consumers but no retail distributionnetwork
The opportunity:
tapping into the number of womens self-help groups that had been springing up
around the country
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Hindustand Liver Project Shakti India
How does it work:
The company provides self-help group women with training in selling and
commercial knowledge, teaching them to become micro-entrepreneurs. Each
woman who becomes a distributor usually invests 12.500 rupees in stock at the
outset, usually borrowing from self-help groups or micro-finance banks facilitatedby HL. Each aims to have around 500 customers, mainly drawn from her village
self-help groups and from nearby villages. Most generate sales of 11.000 rupees a
months, netting a monthly profit of 850 rupees.
The results:
Project Shakti has proved to be a great success forH
L and for women in India.The projects started in a few pilot villages in Andhra Pradesh in 2000 and by 2004
had grown to over 13.000 Shakti women entrepreneurs covering 50.000 villages in
12 states, selling to 70 million customers. HL believes that its project changed
Shakti women lives in ways that are much more profound than the income they
earn selling soaps and shampoos. It has brought them self-esteem, a sense of
empowerment and a place in society.
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Royal Philips Electronics India
The product:
Lanterns and lamps that do not need neither on-grid power not kerosene
The challenge:
The majority of the regions without electricity are in rural areas and therefore not
served by existing retailing networks. Conventional distribution approach in thesearea would be too expensive and results in unaffordable products.
The opportunity:
team up with women's self-help groups contacted through the NGOs Philips works
with. The women in these self-help groups often have access to microloans. They
could therefore each purchase a small number of lamps and sell them to friendsand acquaintances typically at home demonstration parties
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Tupperware Brand Corporation India
The products:
Kitchenware and houseware
The challenge:
Educate Indian consumers on how to use western kitchenware and to the benefit it
can bring them
The opportunity:
Tupperware believes that women enjoy getting together and share their
experience. It also believes that the kitchen is the realm of women and therefore
only a woman can demonstrate how to use kitchenware products to other women
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Tupperware Brand Corporation India
How does it work:
Tupperware women sales consultants sales wares directly to consumers through
a party plan approach. They arrange social parties at their homes, or in the
homes of willing customers where they demonstrate and sell the companys
products. Results:
Since the early 1990s, the company rapidly expanded in developing markets where
women often face steep educational and cultural barriers to employment. In India
alone, the company has a sales force of more than 50.000 women. When they
started in 1996, the company often had to convince conservative husbands and inlaws to allow their wives and daughters-in law to try this job. According to Asha
Gupta, managing director for India, there is a palpable societal change that we
are engineering to empower women to become confident- by offering them
financial independence, identity, exposure, and a secure future for them and their
family.
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Avon South Africa
The products:
Cosmetics
The challenge:
Since its foundation in California, Avon relied on a network of direct sales agent
and was eager to replicate the model in emerging markets. However, theconditions founded in emerging markets forced the company to define a new way
to run its network of direct sales agent
The opportunity:
Provide an attractive business opportunity for the large number of unemployed
women in South Africa.
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Avon South Africa
How does it work:
Avon extends a small amount of credit at the outset and most women begin by
filling small orders and convert the profits from these small sales into
subsequently larger orders. Avon also allows a substantial profit margin giving an
average commission of 20 per cent of the retail price of goods. Avon also providestraining in skills including financial management and team building that can be
transferred to other context. Moreover, the company defined the Build your
dream campaign, which aims to encourage women to identify their life goals and
teaches them how to plan financially to realise them.
The results:
Research proved that womens participation in Avon network not only improves
their income but also build their confidence, self esteem and autonomy.
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Belcorp Latin America
The products:
Cosmetics
The challenge:
Replicate the person to person direct sales business that succeeded in developed
markets. Given the inequality of America Latina societies the only women thatwere interested in becoming direct sales agent were poorly educated and without
access to capital or business training
The opportunity:
Encourage women from low income households to become direct sales agent by
providing them an earning opportunity and offering them financial, social, andemotional support
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Belcorp Latin America
How does it work:
Consultants meet with their managers every three weeks to discuss business and
sales strategies. These are also opportunities for networking and creating social
bonds between consultants, where the women can share experiences and learn
from each other. Through the companys policies, beauty consultants are alsoencourage to save money and grow their business. All purchases and payments
for product sales at Belcorp are managed through bank transactions so as to
bringing women into banking as a first step to giving them tools for saving,
investing, and accessing credit.
The Results
Belcorps has 650.000 beauty consultants in Latin America, the majority of them
are from low income households.