Wednesday, October 6, 2010

AVON Sales Model Inspires New Solar Company in Uganda

 Solar Sisters, a new solar entrepreneur program, is using Avon's social sales model to spread solar powered lamps across Uganda. The following article drew my attention, and I’m wondering how we might apply the author’s observations to our businesses:

Did you know energy and cosmetics have a lot to do with gender? According to Alex Aylett ,author of Solar Sisters: The Avon Lady of African Renewables, Solar Sisters uses the special place women have as procurers and managers of fuel use to take on the social, environmental and economic impacts of energy poverty.

In developing countries,women are primarily responsible for gathering, purchasing and using household energy: wood, coal, kerosene or gas. Smoke from using these fuels indoors causes serious long term health problems. In addition, poorer households have pay more for energy costs.

Solar Sisters approach to these issues is simple: they sell two different solar lamps (a basic model, and a larger one that also recharges cellphones). The lamps can replace both kerosene lights and long trips into urban areas to get phones recharged.

Katherine Lucey, former banker and founder of Solar Sisters, explains the multiple benefits of the lamps:

“With solar, they don’t have to breathe in tadooba toxic fumes. When they look at the black walls of their house, they realize that if the walls are black, the inside of their lungs are black...Economically, it makes sense because within two months, they they'll recover the cost of having to buy kerosene. This immediately frees up 20 percent of their income.” From a recent ChangeMakers article

Oxford business professor Linda Scott argued last year that the Avon model might  be better then microfinance when if comes to lifting women out of poverty. Initial results from research that she has been doing in South Africa show it to be more accessible than microcredit and well suited to dynamics of local communities.

Lucey claims for female entrepreneurs working for Solar Sisters, the lamps offer a rare economic opportunity and can bring in up to US $450 a year. Solar Sisters covers the upfront costs of the women's first solar light inventory, then they use their earnings to purchase more inventory.

The biggest hurdle may be the price of the lamps themselves. The two models sell for US$15 and US$45. Although the price for the lamps be out of reach for many families Solar Sisters blog points out how one community collectively financed their purchases (something also done for livestock and other larger purchases). After 2 months the lamps have paid for themselves in money saved in reduced energy purchases, then continue to save a family about 20% in their energy costs.

Solar Sisters is a promising project – and the image of solar “Avon Ladies” spreading across Africa is hard to resist. Solar Sisters is addressing the same issues as the impressive Indian Barefoot Solar Engineer program. That program's success depended both on a clear understanding of women's roles as energy managers and on a smart approach to financing.

Alex notes:For Solar Sisters to really take off, I have a feeling that they will take the lessons learned from their early clients' community financing arrangements and build them directly into their business model.

Now how can we apply this information to our businesses? Click here to go to our members’ discussion forum.

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