Beauty retailer triumphs in South Africa

In her mission to investigate how the global marketplace can be enhanced to benefit women, Linda Scott, from the University of Oxford’s Saïd Business School, has recently discovered a sustainable model from an unlikely source: Avon, the global retailer of beauty and related products.

Focusing on black, female sales representatives in South Africa, the three-year study - led by Prof Scott and her colleague, Catherine Dolan - shows that within 16 months these women earn enough to cover a typical household’s expenditures, placing them in the top half of black females in their community and bringing them in line with the average remuneration of a black South African man.

“These women in Africa are entrepreneurs” says Prof Scott, who has developed a case study to use in MBA classrooms. “[And] the Avon system shows important ways in which women’s entrepreneurship can be supplemented to increase effectiveness and reduce risk.”

Rather than loaning money and charging interest the way most microfinance models do, Avon gives an inventory to its representatives. It then allows the women to increase the number of items on their inventory and also carries out credit assessments. If any of the women are struggling financially, the inventory is reduced.

“Avon focuses on training and recognises achievement; giving awards etc,” says Prof Scott. “It has a very articulate, pro-woman stance [which] in a developing world context is very important – it is a statement of belief for all these women in a society where they have not yet been valued.”

Indeed, the women working for Avon often have troubled backgrounds: rape, refugees, orphans. One woman, aged 18, was left supporting her five siblings following the death of her parents from HIV. She taught a computer literature class but because that did not provide her with sufficient income to support the family she started to sell Avon products to the class.

This is the case for many. Of the 300 sales representatives surveyed, 75 per cent reported that Avon had helped them achieve financial autonomy and nearly 90 per cent said they now had the skills and confidence to apply for other employment. Overall, the majority felt a sense of support and empowerment. In a country where the incidence of violence against women is extremely high, this is all the more valuable, says Prof Scott.

Through her case study Prof Scott also aims to investigate the moral dilemma the model may raise about the nature of Avon’s product line. Though providing staple supplies such as soap and shampoo, it is primarily beauty based. Some would argue food and water are more important for developing countries, however Prof Scott considers this attitude profoundly dehumanising. “It condemns [people] to the status of livestock!” she says.

She describes one woman she met, living in an informal settlement, who would save up to buy Avon’s small packets of fragrance when they were on special offer: “They reminded her that she was a human being… I would not want to take that away from her, would you?”

This study is published in the journal Entrepreneurship Theory and Practice and is part of a research series called the “Double X Economy.”