After investigating the BoP and identifying potential routes to market, findings and recommendations need to be tested in real life conditions.
Is the approach financially viable? Can challenges and obstacles be transformed into opportunities?
By designing, planning and managing pilot studies, Reciprocity can assist its customers in stress-testing assumptions and fine-tuning experimental models.
The point of running pilot projects is not necessarily to get everything right at the first go, but rather to gather learnings and break down entrenched patterns of thinking within an organisation.
- Save Act
- The Micro-Energy Alliance
- PepsiCo: Testing delivery at the BoP
- The Tourism Community Development Trust
Save Act is a South African micro-finance institution aiming to create entrepreneurial opportunities for its 60,000 members. The organization operates in rural regions of the country, building the financial capability of individuals to manage their own financial services, meet consumption needs and invest in sustainable livelihoods.
The rural regions of South Africa are particularly under-resourced: high unemployment rates, high dependence on social grants and remittances.
Reciprocity currently pilots an innovative business model, experimenting both direct selling and sales through savings groups of SaveAct. The business processes are adapted to the local rural context: from the first stages of brainstorming to the creation of a range of products, from the recruitment and training of teams of resellers to the placing of orders to the delivery of the products.
CIPLA is a leading global pharmaceutical company based in India is aiming to expand its market reach in South Africa, most particularly in low-income communities who lack access to quality and low-cost health services.
The South African public health sector provides free care at point of delivery, however the overwhelming demand impacts the quality of healthcare accessible to the target population.
Reciprocity is currently working with CIPLA to develop a business model that integrates micro-entrepreneurs who start stocking and selling CIPLA products. This pilot contributed to the opening of two dozen outlets in the townships. Currently in the scale-up phase, CIPLA is developing another model that will evolve into more elaborate low-cost medical facilities, including dentistry and other services.
Over the past decade and a half, the drive to improve access to energy in South Africa has yielded impressive results: the number of households with access to electricity has more than doubled in a matter of 15 years, from 4.5 million in 1994 to 9.1 million in 2008 – a jump from 50% of households to almost 75%. The aim of South Africa’s Department of Energy is to achieve universal access to energy by 2014. Yet there is a difference between access and affordability, and in a country where 19 million people live on less than R 20 (EUR 2) per day, much remains to be done, not only to deliver universal access to electricity, but to ensure that energy is affordable, safe and clean.
To answer this need, with initial funding from the Citi Foundation and Fondation Alstom, PlaNet Finance, the Business Place and Restio Energy have set up the basis of the the Micro Energy Alliance (MEA).
MEA is a microfranchise retail distribution channel to propose Energy Efﬁcient and Renewable Energy (EE&RE) solutions- such as insulation systems, LED solar lamps, solar water heaters, and efﬁcient stoves- to low income households in South Africa. This is made possible by carrying out market research, sourcing EERE solutions, facilitating business training and microﬁnance options for micro-franchisees and households.
Reciprocity acts as a support to the field operations of the Micro Energy Alliance, testing the channels with the goal of improving the access to EE&RE solutions at the BoP.
MEA also offers a “route to market” for large energy companies that have viable products but limited BoP distribution channels. While MEA is still at a pilot stage, opportunities are already emerging, leveraging on local human resources for the marketing, distribution and maintenance of the EERE solutions.
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Throughout the emerging world, unbalanced diet is inherent to low income communities. Peri-urban South Africa is no exception. Malnutrition statistics are alarming and are getting worse. With the price of food consistently increasing, the purchase choice will most probably grow towards highly calorific products (fat and sugar), consistently increasing bad health prognoses.
Although informal traders constitute today’s keystone to improve access to more adapted products and services at the BoP, very little knowledge on their behavior and needs, as well as their target market, filters up to corporates serving or willing to serve the low-income market.
Through the development of a simple delivery system, finally linking formal to informal economy, Reciprocity proposes to:
– channel practical knowledge on the needs and expectations of informal traders as well as the population purchasing from them.
– test techniques and technologies helping informal in the development of their business, fostering good business practices and proposing hygiene solutions
– develop a profitable micro-franchise distribution and retail social business improving access to good food, health and nutrition to the BoP
The Tourism Community Development Trust (TCD Trust) is a tourism-focused development agency based in Cape Town, South Africa.
The TCD Trust’s objective is to make a difference at a grass-roots level in South Africa’s communities by consolidating the fundraising and social investment efforts of companies within the South African Tourism industry.
Reciprocity embarked on a year-long consultation with the community and tourism companies associated with TCD trust to define and propose the basis of the development of Blomvlei Multi-Purpose Centre Project.