Retail in developing countries

IN THE late 19th century “Avon ladies” started to knock on America’s doors to sell beauty products. In the early 21st century “phone ladies” began offering phone service to rural Bangladesh by renting out their mobile phone. Now a growing number of women entrepreneurs in poor countries are combining both distribution models to sell everything from soap and nutrition to medicine and solar lamps.

Most get their wares from social enterprises. Living Goods, which operates in Uganda, offers a smattering of 70 products, including clean-burning stoves, anti-malarial drugs and toiletries (see picture). Also in Uganda, Solar Sister has women sell solar lamps in rural communities. And in India InVenture hires “maitris” (“trusted friend” in Hindi) who get a commission for signing up locals to use InSight, a money management program that uses text messages (it also helps users to build a credit score, which makes it easier to get a loan).

Chuck Slaughter started Living Goods in 2007 after working for a charity in Kenya that runs small shops on street corners selling medicines. He realised that conventional storefronts can only reach a limited number of consumers, especially in rural Africa. “Distribution is often the missing link between design and impact,” explains Mr Slaughter. One of Living Goods’ products is Sprinkles, a mix of micro-nutrients designed for anemic children. Although widely acclaimed when it was invented in the late 1990s, only a quarter of the 300m of the children who need the product worldwide have access to it.

Another advantage of the Avon model is that it is based on trust. “By having people at their doorstep from the local community, people they can relate with, telling them about this new product, they’re more likely to consider it,” says Shivani Siroya, founder of InVenture.

Women entrepreneurs can also top up their income—and decide themselves how much they want to make. “Solar Sisters”, for instance, are not pressed to sell as much as they can. If a sister’s needs are met by selling four solar lamps that month, she does not need to sell more, says Katherine Lucey, the founder of the charity.

Although the Avon model has proven to be a success, its adopters are already trying to improve it. In August Living Goods, for the first time, hired male entrepreneurs in a pilot project to see whether they will perform as well as women. It has also introduced a mobile service to help its agents manage payments and communicate with their customers. Nearly half of Living Goods’ female entrepreneurs now use the technology, for instance to send text messages to remind customers to take the medicine they have purchased.