Expanding door-to-door sales in the developing world

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In Mirebalais, Haiti, a line of women in blue aprons embroidered with the word Chakipi stood before Chelsea Clinton, vice chair of the Clinton Foundation.

The Haitian entrepreneurs spoke in Creole about their experience with door-to-door sales of household products like spaghetti, shampoo and corn flakes. And Clinton, who traveled to Haiti along with Clinton Foundation President Donna Shalala and supporters last week, revealed exclusively to Devex that given the results of the pilot in the Central Plateau, the model will scale nationally, while also expanding to Colombia and Nigeria.

“Now the women with their income are buying animals so they’ll have more products to sell, whether it’s milk or eggs,” Clinton said, explaining how, despite challenges ranging from extreme poverty to rampant domestic violence, female entrepreneurship is on the rise in this country. “You know that, to me, is incredibly inspiring.”

Chakipi means “to your home” in Quechua, a Native American language spoken in Peru. That is where the Clinton Giustra Enterprise Partnership first launched the Chakipi Accesso Distribution Enterprise before expanding to Haiti. The country, which is the poorest in the Western Hemisphere and widely cited as an example of how disaster recovery can become a disaster in and of itself, is a place of special importance to the Clinton family, with its roots in the honeymoon Bill and Hillary took there in 1975 and its branches in the $30 million the Clinton Foundation has raised for Haiti since 2010.

“When we had our very first board meeting, it was called ‘the human network,’” Mark Gunton, CEO of CGE Partnership, said of what eventually evolved into Chakipi Accesso, which trains women sellers to set them up for success and provides them with a broad range of products, from food to consumer goods to products like clean cookstoves and solar lanterns. “I was aware of this being a real market opportunity.”

CGEP, which creates social enterprises through impact investing in the developing world, has three enterprise models: supply chain enterprise, training enterprise and distribution enterprise. Gunton explained that the initiative will not pursue projects unless there is potential for scale without long-term dependence on the funds of donors like Canadian philanthropist Frank Giustra and Mexican philanthropist Carlos Slim. Gunton, who joined CGE Partnership in 2012 after 28 years working in supply chain and logistics for Fortune 500 companies, saw the most promise of this distribution enterprise model to recruit and train women entrepreneurs who live in the “last mile.”

Chelsea Clinton talks to Devex reporter Catherine Cheney about reasons for optimism in Haiti.

He was not the first. Avon got its start in rural America in the late 19th century, with “Avon ladies” knocking on doors to sell beauty products. Now, an increasing number of nongovernmental organizations are recognizing this strategy as an effective way to to reach the poorest regions of the world.

“It’s just a very powerful model,” Chuck Slaughter, the founder and CEO of Living Goods, told Devex. “It works everywhere. It crosses every political, geographic, economic, social context, with relatively little modification.”

Living Goods works with sales agents in Uganda and Kenya, but it also advises other organizations — including Population Services InternationalCARE and BRAC — to scale this model worldwide.

“Our reason for being really is helping others, be they nonprofit organizations or funders, basically steal our model,” he said, adding that Living Goods consulted with CGE Partnership as it set up its initial network of women entrepreneurs in Peru. “We stole from Avon. We want other people to steal from us.”

Slaughter said he believes the only way to make money in the long term in this business is to have proprietary, exclusive products, like a fortified porridge that has become the best-selling Living Goods product. He also emphasized the importance of harnessing all that mobile technology can add to door-to-door sales, explaining that from his office in San Francisco, California, he can check in on the performance of an individual seller in Uganda or drive sales through an SMS promotion. Chakipi seems more focused on offering a broad range of products, 50 or 60 compared with two or three, and the experience of the women who participate in the program.

Gunton, who has been to Haiti some 20 times in the past few years, said the pilot in Mirebalais did not succeed for the same reasons the team had expected. Initially, CGE Partnership was looking to build on the success of the Acceso Peanut Enterprise Corp., also based in the Central Plateau, as their rural depots could serve as convenient meeting locations for the entrepreneurs.

“The depots proved not to be in the best places,” he said. “But in place of that, what we did get, what we didn’t necessarily expect, was the ability to recruit, retain and turn into very effective sales agents Haitian women. They’re just naturally entrepreneurial. They’re very motivated. They want to make money.”

Discussing expansion of Chakipi beyond Haiti, Gunton said CGE Partnership selected Colombia in part because it emerged as a priority for Unilever, its corporate partner in Haiti, after the company did research on the direct sales potential of their products. Nigeria was also a natural choice, he continued, because of strategic partners who are friends of the Clinton Foundation based there.

Standing before a table of products including Mistolin lavender cleaner, Raid bug spray and Maizena corn starch, Lee-Siane Jeager, general manager for Chakipi in Haiti, explained that the average Chakipi seller made fives times the national average income last month, reaching a benchmark of success that will lead to the spread of the program to new markets in Haiti.

Gunton said the Haiti program is aiming to expand to 570 Chakipi sellers by the end of the year, up to 1,500 in 2016 and 3,000 the next year, working with partners like Partners in Health to break into new communities.

Chakipi’s promoters hope the expansion will lead to more stories like those that energized Clinton last week, including the story of Midkenda Désert, 23, who left school at a young age in order to support her family, but is now able to return to her studies, earn a regular income and maintain flexible hours so that she can be there for her 1-year-old son.

Hugh Locke, the president of the Smallholder Farmers Alliance and part of the delegation of supporters who traveled the country, said meeting women like Désert inspired him to explore a collaboration with CGE Partnership that would bring this model to the north of his country, where his organization works.

“Development has changed significantly in the past five years in particular toward a more market based approach that can truly be sustainable,” he explained to Devex. “The Clinton Foundation is at the cutting edge of finding, supporting, and connecting those initiatives in Haiti.”

The Clinton Foundation has the clout to connect and convene diverse partners, coupled with a huge budget that is only growing.

“[Former U.S. President Bill] Clinton is just so well-networked. It makes the attraction and retention of the partners very easy,” Gunton said. “There’s definitely a competitive advantage.”

Slaughter added that the organization is smart to hire people who know how to build businesses, mentioning the background Gunton brings to the table, but he added that the trick will be to maximize both profitability and impact.

“My philosophy and our board’s philosophy — we’d rather have 50 percent market share in two countries than 5 percent market share in 10 countries,” he said.

Meanwhile, Gunton has global expansion on his mind.

“I can’t think of any country in the developing world where Chakipi won’t work,” he said. The ultimate dream, he continued, is not only to improve the livelihoods of hundreds of thousands of women, all through scalable and sustainable development, but also to use the networks they build as “push systems” for development objectives beyond sales.

Article By Catherine Cheney Posted to deveximpact 04 August 2015