Sharing our expertise in last-mile distribution

Many people in developing countries live in areas that are hard to reach, through poor infrastructure or geographical isolation. This means they have very limited access to essential products and services that are readily available to others. Generally, what they can get hold of is either more expensive or lower quality. They are also unable to participate in – and benefit from – business value chains.

Serving these consumers is often not viable for large companies. But for social enterprises, they can present a significant opportunity. And many of these entrepreneurs are developing ingenious solutions to overcome the challenges, build successful enterprises and enhance the livelihoods of the individuals – predominantly women – and communities involved.

But there’s a problem.

Last-mile distribution, as it’s called, is challenging because each country and context is usually very different. And with little co-sharing of knowledge and skills, social enterprises tend to design and build their distribution models from scratch each time. Essentially, reinventing the wheel. Ultimately, this means they aren’t able to scale up quickly. And that affects our business too.

For over ten years, Unilever has helped pioneer last-mile distribution models. For example, through our Shakti programme in India, we train local women as rural sales agents. Today, Project Shakti has over 72,000 micro-entrepreneurs supported by 48,000 Shaktimaans (typically the husbands or other male family members of Shakti Ammas who sell products by bicycle in surrounding villages). We have variations of the programme in Bangladesh, Vietnam, Sri Lanka and Egypt. In Pakistan, we took the concept to a new level, training hundreds of village women as beauticians. These Guddi Bajis (“good sisters”) provide beauty services from home and sell our products to neighbours.

Through developing and implementing these programmes, we have learned a great deal about what works well and what doesn’t. There’s no silver bullet and one size certainly doesn’t fit all. But we have come up with a framework that draws on our extensive insights and expertise, and that of our external partners. Along with BoP Innovation Centre, we created ASPIRE (PDF | 452KB), which we use as a guide to help us make quicker, better choices in applying innovative solutions and investments to scale up inclusive distribution models. Now we are sharing it so the efforts of others are more successful and sustainable.

As Gerald Kuehr, Unilever’s Chief Customer Officer, says: “Through our Sustainable Living Plan, we have committed to improve the wellbeing of over a billion people, and include millions more in our value chain. Establishing innovative distribution networks will play a vital role in realising those ambitions.

“This aim of enhancing livelihoods and driving economic growth also sits at the heart of the UN Sustainable Development Goals. We are sharing our knowledge and expertise, so we can all achieve these quicker. Collective action is the most powerful tool we have to drive positive change.”

ASPIRE highlights six key building blocks and a six-step process, to help last-mile distribution enterprises focus on and build in the right level of operation rigour at each stage of development. For instance, at the outset, it helps decide if social distribution is right for them and what partnership model would be appropriate. Right through to getting the team in place, testing assumptions, replicating the model in multiple locations and, ultimately, aiming for impact at scale.

Developing a successful inclusive distribution enterprise or partnership takes months of patient and strategic investment. It’s important to layer success on success. And that’s where ASPIRE can help.

Speaking about the motivation to collaborate with Unilever on the initiative, Emile Schmitz, BoP Innovation Centre’s Director for Marketing and Distribution, says: "Leaning on Unilever’s deep expertise, we co-created a framework that can support any inclusive distribution team, regardless of product, target group, market or cultural context.

“ASPIRE doesn't give all the answers. It simply provides an intuitive set of building blocks, questions and guiding principles that can help kickstart and develop models. We are already applying ASPIRE successfully across various programmes, and hope it will help others optimise their distribution and marketing efforts to low-income populations.”

In Ethiopia, Unilever’s distribution to rural communities is restricted due to poor infrastructure. This limits access and affordability for over 70% of the population who live in remote territories. To reach these under-served communities, the team worked with the Clinton Giustra Enterprise Partnership to develop a social distribution initiative that creates income opportunities for women micro-entrepreneurs, while improving access to goods and services for rural consumers.

The team used an ASPIRE workshop to design a cost-effective logistics and distribution strategy, as well as an agent retention model to build a reliable delivery system for servicing these communities. The programme is currently being validated, but the innovative approaches are already improving retailer performance and establishing a positive culture.

Since Unilever Nigeria launched its Gbemiga programme in 2015, it has enrolled over 2,000 female micro-retailers. But it was time to scale up. We wanted to accelerate expansion into new white spaces and extend the basket of goods with non-competing brands to increase the incomes of high performers.

Using the ASPIRE framework, the team designed an assessment tool to ensure they made the right choice of local partners. They are currently in talks with a global corporate for inclusion in the product basket and with additional implementing partners who could help us expand into new territories.