COMMERCIALIZING	
  A	
  
HANDWASHING	
  DEVICE	
  	
  
IN	
  RURAL	
  VIETNAM	
  

Global	
  Young	
  Leaders	
  Programme...
Table	
  of	
  Contents	
  
•  Executive	
  Summary	
  

	
  

	
  

	
  

	
  

	
  

	
  1	
  

•  Overview

	
  

	
  
...
Execu@ve	
  Summary	
  
¨ 

¨ 

¨ 

With	
  a	
  lack	
  of	
  hygiene	
  awareness	
  in	
  Vietnam	
  and	
  the	
  i...
Execu@ve	
  Summary	
  (2)	
  
¨ 

¨ 

¨ 

A	
  mutually	
  beneficial	
  partnership	
  with	
  the	
  Vietnam	
  Wome...
Overview	
  
i. 
ii. 

Vietnam:	
  Country	
  Background	
  
Objective	
  
Vietnam:	
  Country	
  Background	
  
¨ 
¨ 

¨ 

¨ 

Population	
  :	
  85.7	
  million	
  
Per	
  capita	
  income	
 ...
Vietnam:	
  Country	
  Background	
  (2)	
  
¨ 
¨ 

¨ 

70%	
  of	
  population	
  resides	
  in	
  rural	
  areas	
  
...
Hygiene	
  and	
  Sanita@on	
  in	
  Vietnam	
¨ 

¨ 

¨ 

Lack	
  of	
  access	
  to	
  water	
  supply,	
  sanitation	...
Need	
  for	
  Hand	
  Washing	
  with	
  Soap	
  
¨ 

¨ 

¨ 

Only	
  6.1%	
  of	
  people	
  practice	
  hand	
  wash...
Pandemic	
  Flu	
  Preven@on	
  
¨ 

¨ 

¨ 

The	
  threat	
  of	
  pandemic	
  flu	
  is	
  ongoing	
  and	
  the	
  r...
Business	
  Plan	
  Objec@ve	
  
Hygiene	
  improvement	
  /	
  
promotion	
  
Hand	
  
Washing	
  
Behavior	

+	

Market	...
Why	
  a	
  Hand	
  Washing	
  Device?	
  
• Improved Hygiene
• Family Wellbeing

• Increased Income
• Sense of Purpose

C...
The	
  Case	
  for	
  Commercializa@on	
  
i. 
ii. 
iii. 
iv. 
v. 

Value	
  Proposition	
  
Introducing	
  the	
  Hand	
 ...
Value	
  Proposi@on	
  
¨ 

A	
  hand	
  washing	
  device	
  that	
  provides	
  a	
  solu@on	
  to	
  a	
  public	
  
h...
Introducing	
  the	
  Hand	
  Washing	
  Device	
  
¨ 
¨ 

¨ 

¨ 

¨ 

Improves	
  hygiene	
  of	
  rural	
  househol...
Product	
  Features	
  
¨ 
¨ 
¨ 
¨ 
¨ 
¨ 
¨ 
¨ 

Removable	
  lid	
  
Easy	
  to	
  open	
  &	
  close	
  lever	
 ...
Social	
  Benefits:	
  Health	
  	
  
¨ 

Reduces	
  Infectious	
  Disease	
  
Hand	
  washing	
  with	
  soap	
  is	
  es...
Social	
  Benefits:	
  Economic	
  
¨ 

¨ 

¨ 

¨ 

The	
  Water	
  &	
  Sanitation	
  Program	
  (WSP)	
  
estimates	
...
Market	
  Opportunity	
  
¨ 

75%	
  of	
  Vietnam s	
  population	
  are	
  rural	
  dwellers	
  with	
  a	
  need	
  fo...
Soap	
  Market	
  Poten@al	
  
¨ 
¨ 

975,000	
  households	
  reached	
  in	
  5	
  years	
  
Bar	
  soap	
  will	
  be...
Vietnam	
  Hand	
  Washing	
  Ini@a@ve	
  

¨ 

¨ 

	
  Running	
  from	
  2006	
  through	
  2011.	
  Led	
  by	
  the	...
Venture	
  Concept	
  
Social	
  Enterprise	
  

Women’s	
  Union	
  

“Happy	
  Team”	

Rural	
  Households	
  

Province...
Business	
  Plan	
  
i. 
ii. 
iii. 
iv. 

Business	
  Model
	
  
	
  
Production	
  Plan
	
  
	
  
Sales	
  &	
  Marketing...
Business	
  Model	
  
i. 
ii. 
iii. 
iv. 
v. 

Strategy	
  
Key	
  Partners	
  
Value	
  Proposition	
  for	
  Key	
  Part...
Strategy	
  
	
  
	
  
	
  
	
  
¨ 
¨ 

¨ 

Pilot	
  Phase	
  

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
 ...
Key	
  Partners	
  &	
  Business	
  Model	
  Diagram	
  
Participating	
  

Steering	
  Committee/	
  
Board	
  
Place	
  ...
Key	
  Partners	
  
WOMEN S	
  UNION
	
  
¨ 

¨ 
¨ 

Promotes	
  gender	
  rights	
  
and	
  women s	
  issues	
  

IDE...
Key	
  Partners	
  (2)	
  
FINANCIAL	
  INVESTORS	
  
¨ 
¨ 

¨ 

Provides	
  start-­‐up	
  capital	
  
Offers	
  manage...
Value	
  Proposi@on	
  for	
  Key	
  Partners	
  	
  
	
  	
  Outcome	
  

	
  	
  Contribution	
  

Women’s	
  Union	
  
...
Value	
  Proposi@on	
  for	
  Key	
  Partners	
  (2)	
  
	
  	
  Expectation	
  

	
  	
  Contribution	
  

International	...
Business	
  Model:	
  Pilot	
  Phase	
  
Steering	
  
Committee	
  

HWD	
  Initiative	
  (Department	
  within	
  IDE)	
 ...
Pilot	
  Phase:	
  Implementa@on	
  Strategy	
  
Today	
  

Execute	
  
Contract	
  With	
  
Partners	
  

3	
  months	
  ...
Pilot	
  Phase:	
  Steering	
  CommiYee	
  
Steering	
  Committee	
  
¨ 
¨ 

Includes	
  representatives	
  from	
  WU,	...
Pilot	
  Phase:	
  Role	
  of	
  Women s	
  Union	
  
¨ 

Women s	
  Union	
  Support	
  for	
  various	
  aspects	
  is	...
Pilot	
  Phase:	
  Cri@cal	
  Assump@ons	
  
¨ 

The	
  sales	
  agent	
  makes	
  enough	
  income	
  to	
  support	
  a...
Business	
  Model:	
  Phase	
  2	
  &	
  3	
  
Invite	
  Pilot	
  Phase	
  partners	
  to	
  participate	
  in	
  the	
  n...
Phase	
  2	
  &	
  3:	
  Ra@onale	
  
¨ 
¨ 
¨ 

¨ 

¨ 
¨ 

Start	
  up	
  capital	
  provided	
  by	
  the	
  aforem...
Business	
  Model	
  Roadmap	
  
Pilot	
  Phase	
  (1	
  Year)	
  	
  

Phase	
  2	
  (1	
  Year)	
  

Phase	
  3	
  (3	
 ...
Cri@cal	
  Success	
  Factors	
  
Pilot	
  Phase	
  (1	
  Year)	
  
1. 
2. 

3. 

4. 
5. 
6. 

Funding	
  Support	
  for	
...
Sales	
  &	
  Marke@ng	
  Strategy	
  
i. 
ii. 
iii. 
iv. 
v. 
vi. 

Opportunity	
  
Target	
  Market	
  
	
  
	
  
	
  	
...
Sales	
  Opportunity	
  
¨ 

Potential	
  market	
  for	
  hand	
  washing	
  device	
  is	
  $96	
  million	
  

	
  
¨...
Market	
  Research	
  Focus	
  	
  
¨ 
¨ 

¨ 

Current	
  hand	
  washing	
  situation	
  in	
  Vietnam?	
  
What	
  ar...
Market	
  Research	
  Key	
  Findings	
  	
  
¨ 

Low	
  hygiene	
  standards:	
  
¤ 

¨ 

Rural	
  women s	
  aspirati...
Target	
  Market	
  
Consumer	
  	
  Demographics	
  
¨ 

¨ 

¨ 

Monthly	
  income	
  US$50-­‐US$70	
  
per	
  capita	...
Visual	
  Iden@ty	
  
Price	
  Point	
  
¨ 

¨ 

Focus	
  groups	
  and	
  field	
  research	
  conducted	
  by	
  WSP,	
  IDE,	
  IDEO,	
  an...
Vietnam	
  Women s	
  Union	
  
¨ 

Engage	
  Vietnam	
  Women s	
  Union	
  to	
  take	
  ownership	
  of	
  the	
  
sal...
Vietnam	
  Women s	
  Union	
  
¨ 

¨ 

As	
  well	
  as	
  having	
  extensive	
  reach,	
  the	
  WU	
  is	
  an	
  in...
The	
  Happy	
  Team	
  
¨ 

Within	
  each	
  commune	
  WU	
  has	
  a	
  15	
  member	
  executive	
  board	
  
¤ 

¨...
The	
  Sales	
  Process	
  
1.	
  Manufacturer	
  
Ships	
  product	
  to	
  
Women s	
  Union	
  
2.	
  Coordination	
  /...
The	
  Marke@ng	
  Mix	
  
Mass	
  Media	
  
¨ 

WSP	
  
¤ 

¨ 

¨ 

Feature	
  in	
  hand	
  washing	
  
initiative	
...
Private	
  Marke@ng	
  Partner	
  Support	
  
INPUT	
  
PRIVATE	
  
SECTOR	
  
PARTNER	
  

BENEFITS	
  

§ 	
  Seed	
  F...
Co-­‐Branding	
  Opportunity	
  
Women s	
  Union	
  and	
  	
  

First	
  50,000	
  units	
  will	
  be	
  	
  

private	...
Implementa@on	
  Strategy:	
  
Pilot	
  Phase	
  Objec@ves	
  
¨ 

¨ 

After	
  the	
  Pilot	
  Phase,	
  we	
  expect	
...
Implementa@on	
  Strategy:	
  
Pilot	
  Phase	
  Ini@al	
  Target	
  Area	
  
Selection	
  Principles	
  
¨ 

¨ 

¨ 
¨...
Implementa@on	
  Strategy:	
  
Sales	
  Area	
  Expansion	
  
Plan	
  to	
  reach	
  600,000	
  households	
  by	
  Phase	...
Sales	
  Forecast	
  –	
  Assump@ons	
  
¨ 

Penetrate	
  2	
  new	
  Provinces	
  each	
  year	
  in	
  Yr	
  1	
  and	
...
Sales	
  Forecast	
  –	
  Assump@ons	
  (2)	
  
¨ 

¨ 

Through	
  the	
  sales	
  agent	
  network,	
  it	
  is	
  esti...
Sales	
  Volume	
  Projec@ons	
  
¨ 

No.	
  of	
  HWD	
  sold	
  (Cumulative)	
  

	
  
	
  

Phases	
  

Pilot	
  

Pha...
Opera@onal	
  Plan	
  	
  
i. 
ii. 
i. 
ii. 
iii. 

	
  	
  
	
  

Supply	
  Chain	
  	
  
Sourcing	
  &	
  Fulfillment	
 ...
Supply	
  Chain	
  
Soap	
  

Partners	
  
$$$	
  

Sales	
  training	
  

Monetary	
  Input	
  

Payment	
  for	
  
	
  p...
Sales	
  and	
  Opera@ons	
  Plan	
  (S&OP)	
  
¨ 
¨ 

S&OP	
  is	
  the	
  alignment	
  of	
  demand,	
  supply	
  and	...
Produc@on	
  Capacity	
  
Production Capacity vs Sales Forecast
45000
40000
35000
30000
25000
20000
15000
10000
5000
0

PI...
HappyTap	
  Product	
  Requirements	
  
¨ 
¨ 
¨ 
¨ 

¨ 

¨ 
¨ 

High	
  Quality	
  
Low	
  cost	
  
Flexible,	
  hi...
HappyTap	
  Assembly	
  
No	
  

Name	
  

Weight	
   Proposed	
  
(gram)	
   Material	
  

1	
  

Water	
  Container	
  
...
Distribu@on	
  Model	
  
Production	
  

Women’s	
  Union	
  

Province Level

District Level

Commune Level

Happy	
  Tea...
Distribu@on	
  and	
  Logis@cs	
  
Production

Program Owner

Province WU

District WU

Commune WU

Happy Team

End User

...
Inventory	
  Management	
  	
  
Production

Social enterprise
Province WU

Production

Inventory
District WU

Happy Team

...
Manufacturing	
  Partner	
  Selec@on	
  Criteria	
  
¨ 

Required	
  
¤ 
¤ 
¤ 
¤ 
¤ 
¤ 
¤ 

Manufacturing	
  exper...
Risk	
  Management	
  
i. 
ii. 
iii. 

	
  	
  
	
  

Risks	
  &	
  Mitigation	
  
Contingency	
  Plan	
  
Exit	
  Strateg...
Risks	
  &	
  Mi@ga@on	
  
Risks	
  
¨ 

Ownership	
  Structure	
  
¤ 

¨ 

¨ 

Negative	
  	
  association	
  with	
 ...
Risks	
  &	
  Mi@ga@on	
  (2)	
  
Risks	
  
¨ 

Business	
  Partners	
  
¨ 

¨ 

Usability	
  
¨ 

¨ 

Value	
  propo...
Con@ngency	
  Plan	
  
¨ 

Women s	
  Union	
  
¤ 

¤ 

¤ 

¨ 

Success	
  or	
  failure	
  is	
  contingent	
  on	
 ...
Exit	
  Strategy	
  	
  
¨ 

IDE	
  to	
  exit	
  upon	
  commercialization	
  of	
  HappyTap	
  

	
  
¨ 

Investors	
 ...
Management	
  and	
  Governance	
  
Objectives	
  of	
  Governance	
  	
  
General	
  Governance	
  Principles	
  
Corpora...
Governance	
  Objec@ves	
  
Governance	
  plays	
  the	
  key	
  role	
  of	
  setting	
  and	
  monitoring	
  the	
  dire...
Governance	
  Principles	
  
¨ 
¨ 

¨ 
¨ 

Compliance	
  with	
  all	
  national	
  laws	
  relevant	
  to	
  the	
  b...
Corporate	
  Governance	
  &	
  Management:	
  	
  
Pilot	
  Phase	
  Governance	
  Structure	
  
Steering	
  Committee	
 ...
Phase	
  2:	
  Proposed	
  Ownership	
  Structure	
  
Ownership	
  Concentration	
  Ratio	
  

New	
  Entity	
  setup	
  -...
Phase	
  2	
  &	
  3:	
  	
  
Proposed	
  Organiza@on	
  Structure	
  
Phase	
  2	
  &	
  3:	
  	
  
Management	
  System	
  and	
  Monitoring	
  
Management	
  of	
  system	
  and	
  processes...
Phase	
  2	
  &	
  3:	
  	
  
Management	
  System	
  and	
  Monitoring	
  
Key	
  Management	
  Tools	
  	
  
¨  Process...
Phase	
  2	
  &	
  3:	
  	
  
Management	
  Role	
  of	
  the	
  Board	
  
It	
  is	
  proposed	
  that	
  the	
  board	
 ...
Phase	
  2	
  &	
  3:	
  	
  
Management	
  Role	
  of	
  Chief	
  Execu@ve	
  
¨ 

¨ 

¨ 

¨ 

¨ 

¨ 

¨ 

¨ 

De...
Financial	
  Plan	
  
i. 
ii. 
iii. 
iv. 
v. 
vi. 

Key	
  Points	
  	
  
Pricing	
  Structure	
  
Capital	
  Requirement	...
Key	
  Points	
  
¨ 

Financially	
  attractive	
  business	
  proposition	
  for	
  the	
  sales	
  agent	
  
¤ 

Addit...
Pricing	
  Structure	
  
¨ 

Retail	
  Selling	
  Price

	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  ...
Capital	
  Requirement	
  
¨ 

Initial	
  Capital	
  Requirement:	
   	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
  	
 ...
2011-­‐2016	
  Projec@ons	
  
¨ 

Profit	
  &	
  Loss	
  Projections:	
  

	
  

Year	
  1
	
  

Year	
  2
	
  

	
  Reve...
Financial	
  Evalua@on:	
  Summary	
  
7-­‐year	
  funding	
  required:	
  

	
  $	
  	
  752,500	
  

¤  Initial	
  Capi...
50%	
  

1,000,000	
  
No.	
  of	
  HWD	
  sold	
  

1,200,000	
  

40%	
  

800,000	
  

30%	
  

600,000	
  

20%	
  

4...
1,200,000	
  

50%	
  

1,000,000	
  

40%	
  

800,000	
  

30%	
  

600,000	
  

20%	
  

400,000	
  

10%	
  

200,000	...
Scenario	
  Analysis	
  
% Change
10
Best

5

Base
0
HWD Volume Sales Agent

NPV

Soap Volume

Worst

-5
HWD	
  Volume
	
 ...
Recommenda@on	
  
¨ 

	
  
	
  
	
  
	
  

Due	
  to	
  the	
  benefit	
  earning	
  all	
  parties	
  a	
  win-­‐win	
  ...
Conclusion	
  
¨ 

This	
  enterprise	
  has	
  the	
  ability	
  to	
  raise	
  considerable	
  hygiene	
  awareness	
  ...
Appendices	
  
i. 
ii. 
iii. 

Key	
  Assumptions	
  
Payment	
  Process	
  
Financial	
  Spreadsheets	
  Attached	
  
Key	
  Assump@ons	
  
p 

p 

p 
p 

p 

Year	
  zero	
  is	
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Promoting Handwashing among Rural Households to Improve Public Health in Vietnam, Oct 2010

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In Vietnam, $262 million per year of economic loss results from poor sanitation, a figure which includes costs of health care, productivity loss and premature death. In Oct 2010, GIFT collaborated with International Development Enterprises (IDE) to write a plan for the production and sales of low-cost household hand washing devices in rural Vietnam. This was part of the World Bank’s Water and Sanitation Programme (WSP) behaviour change initiative to promote handwashing with soap as a way to improve health and hygiene. During the field visit, participants worked closely with the Vietnam Women’s Union (WU), one of the largest and most influential government mass organisations in Vietnam. The programme research covers the current hygiene and sanitation conditions in rural Vietnam, the socio-economic importance of handwashing and why it is crucial for rural communities in developing countries to incorporate this as part of a healthy lifestyle.

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Promoting Handwashing among Rural Households to Improve Public Health in Vietnam, Oct 2010

  1. 1. COMMERCIALIZING  A   HANDWASHING  DEVICE     IN  RURAL  VIETNAM   Global  Young  Leaders  Programme     Ho  Chi  Minh  City,  Vietnam:  November  2010  
  2. 2. Table  of  Contents   •  Executive  Summary              1   •  Overview            3   •  The  Case  for  Commercialization          11   •  Business  Plan                          22   •  Sales  &  Marketing  Strategy          38   •  Operational    Plan •  Risk  Management                      58    68   •  Management  &  Governance            73   •  Financials            83   •  Recommendations            92   •  Conclusion              93   •  Appendix              94       •  Business  Model  
  3. 3. Execu@ve  Summary   ¨  ¨  ¨  With  a  lack  of  hygiene  awareness  in  Vietnam  and  the  importance  of  the   proper  enabling  environment  to  drive  behavior  change,  the  proposed   enterprise  has  identified  a  market  opportunity  for  a  hand  washing  device   “HWD”  to  be  commercially  distributed  throughout  the  country.   Considering  a  target  market  initially  comprised  of  individuals  earning  US $50-­‐US$70/month,  the  device  will  be  marketed  as  an  essential  household   item  and  priced  at  US$6.   With  potential  strategic  partnerships  along  the  entire  supply  chain,  the   operation  is  forecasted  to  sell  975,000  units  over  the  next  5  years,  in  3   distinct  phases:  pilot,  growth  &  optimization,  and  expansion  stages.  
  4. 4. Execu@ve  Summary  (2)   ¨  ¨  ¨  A  mutually  beneficial  partnership  with  the  Vietnam  Women’s  Union  will   allow  the  device  to  gain  exposure  to  local  households  through  its  13   million  members,  whilst  providing  positive  social  and  monetary  value  in   return.   With  an  estimated  capital  requirement  of  US$  752,500  over  the  5  years,   the  potential  added  value  to  the  soap  market  is  projected  to  reach  over   US$3  million.  NPV  for  the  enterprise  is  estimated  at  US$50,000,  with  a   payback  period  of  7  years.   The  venture  is  expected  to  improve  the  living  standards  of  Vietnam’s   rural  communities,  while  providing  a  sustainable  business  model  for  the   success  of  all    stakeholders  involved.  
  5. 5. Overview   i.  ii.  Vietnam:  Country  Background   Objective  
  6. 6. Vietnam:  Country  Background   ¨  ¨  ¨  ¨  Population  :  85.7  million   Per  capita  income  rose  from  US$220  in  1994   to  US$1,052  in  2009   Life  expectancy  is  currently  estimated  at   71.94  years  and  the  under-­‐five  mortality  rate   is  23  per  1000  live  births   Avian  flu  is  an  ongoing  threat  in  addition  to   other  potential  infectious  pandemic   outbreaks   Rapid  economic  development  with  ongoing  risks  of  pandemics  
  7. 7. Vietnam:  Country  Background  (2)   ¨  ¨  ¨  70%  of  population  resides  in  rural  areas   Large  inequalities  exist  between  urban   and  rural  areas  in  income,  infrastructure   and  resources   Public  investment  in  water  and  sanitation   is  low  compared  with  other  sectors.    (e.g.     US$10  million  per  year  on  average)   Investment  in  rural  areas  is  CRITICAL  
  8. 8. Hygiene  and  Sanita@on  in  Vietnam ¨  ¨  ¨  Lack  of  access  to  water  supply,  sanitation  and   hygiene  is  a  global  challenge  and  is  associated   with  2.2  million  deaths  per  year  in  the  world   In  Vietnam,  economic  costs  to  health  due  to   poor  sanitation  is  estimated  at  US$262  million   per  year   In  rural  Vietnam  :   ¤  ¤  58%  of  people  have  access  to  clean  water   18%  of  households  have  hygienic  latrines   Poor  hygiene  and  sanitation  creates  negative  impacts  on   health,  preventable  economic  loss  
  9. 9. Need  for  Hand  Washing  with  Soap   ¨  ¨  ¨  Only  6.1%  of  people  practice  hand  washing   with  soap  before  eating   Similarly  low  percentages  of  people  wash   hands  with  soap  before  and  after  baby   changing,  handling  animals,  toilet  use  and   food  preparation     Effective  hand  washing  with  soap  in   Vietnam  would  reduce  the  annual  0.9   million  deaths  from  Scabies,  Helminthes,   Hepatitis  A  and  Trachoma  by  up  to  34%   Washing  hands  with  soap  significantly  reduces  disease  
  10. 10. Pandemic  Flu  Preven@on   ¨  ¨  ¨  The  threat  of  pandemic  flu  is  ongoing  and  the  risks  to  countries  like  Vietnam  have  only   increased  with  high  population  densities  and  human-­‐animal  contact.    Further  outbreaks  are   expected  over  the  next  five  years.   Global  studies  show  that  hand  washing  with  soap  when  handling  animals  is  critical  in   preventing  and  containing  infections.   Vietnam  is  one  of  a  handful  of  countries  that  has  the  highly  pathogenic    H5N1  avian   influenza.  One  of  the  key  messages  for  prevention  of  avian  flu  is  hand  washing  with  soap     The  need  for  hand  washing  with  soap  would  increase   exponentially  in  the  event  of  an  outbreak.  
  11. 11. Business  Plan  Objec@ve   Hygiene  improvement  /   promotion   Hand   Washing   Behavior + Market   Opportunity   = Improvement  of  livelihoods   Lower  child  mortality  rates   Income  generation   A  commercially  viable  solution  to  rural  hygiene  challenges    
  12. 12. Why  a  Hand  Washing  Device?   • Improved Hygiene • Family Wellbeing • Increased Income • Sense of Purpose Customer Supplier • Revenue Stream • Brand Awareness & Trial Distribution Partners Public & Private Partners • Achieve Goals • Positive Social Impact A  commercial  model  that  addresses  a  serious  social  issue  and   benefits  several  stakeholders  
  13. 13. The  Case  for  Commercializa@on   i.  ii.  iii.  iv.  v.  Value  Proposition   Introducing  the  Hand  Washing  Device   Venture  Concept   Social  Benefits   Market  Opportunity  
  14. 14. Value  Proposi@on   ¨  A  hand  washing  device  that  provides  a  solu@on  to  a  public   health  issue  using  a  commercial  model,  which  effec@vely   leverages  both  the  public  and  private  sector.     ¨  Providing  an  aYrac@ve  financial  incen@ve  to  sell  the  device   has  the  poten@al  to  make  the  social  venture  sustainable.       ¨  The  business  model  will  have  a  posi@ve  social  impact  on  the   lives  of  the  Vietnamese  people  through  promo@on  of  hand   washing  with  soap.  
  15. 15. Introducing  the  Hand  Washing  Device   ¨  ¨  ¨  ¨  ¨  Improves  hygiene  of  rural  households   Helps  the  Vietnamese  government  to   measure  the  impact  of  its  hand  washing   initiative   Provides  an  educational  tool  to  support   the  hand  washing  initiative   A  trendy  lifestyle  product  designed  by   award-­‐winning  design  house  IDEO    Creates  a  communication  platform  for  an   FMCG  MNC  in  rural  households    
  16. 16. Product  Features   ¨  ¨  ¨  ¨  ¨  ¨  ¨  ¨  Removable  lid   Easy  to  open  &  close  lever   Perforated  tap  to  conserve  water   Handles  for  easy  carriage   Detachable  basin  for  easy  filling   Bar  soap  holder   Different  color  options  for  lid  &  base   Drainage  for  used  water  
  17. 17. Social  Benefits:  Health     ¨  Reduces  Infectious  Disease   Hand  washing  with  soap  is  essential  for  reducing  risk  of  seasonal   and  pandemic  flu  outbreaks     ¤  Hand   washing   with   soap   has   been   shown   to   reduce   diarrheal   disease  by  47%,  and  respiratory  infections  by  34%   ¤  Diarrheal   disease   is   the   2nd   most   common   cause   of   child   deaths   globally   ¤  n  UNICEF  estimates  one  child  dies  due  to  diarrhea-­‐related  causes  every   30  seconds,  every  day     Hand  washing  with  soap  saves  lives!  
  18. 18. Social  Benefits:  Economic   ¨  ¨  ¨  ¨  The  Water  &  Sanitation  Program  (WSP)   estimates  annual  financial  losses  due  to   poor  sanitation  of  $780  million   Proposed  social  enterprise  builds   capacity  for  a  sustainable  future   commercial  venture   Creates  jobs  at  all  stages  of  the  value   chain   Reduces  absenteeism  at  both  school  &   work   Economic  empowerment  for  local  women  
  19. 19. Market  Opportunity   ¨  75%  of  Vietnam s  population  are  rural  dwellers  with  a  need  for  the   hand  washing  device:   ¤  ¨  Hand  washing  with  soap   ¤  ¤  ¨  ¨  Approx  64million  people  –  16  million  households     Domestic  soap  market  is  US$39  million,  growing  10%  per  year   Hand  washing  initiative    is  changing  behavior   Potential  for  nationwide  distribution  through  Women s  Union   network   New  product  lines  and  expansion  into  new  markets   Potential  market  for  hand  washing  device:  US$96  million  
  20. 20. Soap  Market  Poten@al   ¨  ¨  975,000  households  reached  in  5  years   Bar  soap  will  be  purchase  by  each  household  to  complement   the  hand  washing  device   1  bar/   month     1  bar/   quarter   1  bar/   6  months   1  bar/  year   Soap  Sales   Volume   25  million  bars   8  million  bars   4  million  bars   2  million  bars   Soap  Sales   Revenue   USD  7.5   million   USD  1.2   million   USD  2.4   million   USD  0.6   million  
  21. 21. Vietnam  Hand  Washing  Ini@a@ve   ¨  ¨   Running  from  2006  through  2011.  Led  by  the  Ministry  of  Health  and   supported  by  Women s  Union  (WU),  NGOs,  &  private  sector  partners   To-­‐date,  over  3.2  million  contacts  reached     The  foundation  for  creating  a  market  for  a  hand  washing   device  has  been  laid  
  22. 22. Venture  Concept   Social  Enterprise   Women’s  Union   “Happy  Team” Rural  Households   Province  Level       District  Level   Community  Level   A  social  enterprise  that  seeks  to  improve  public  health  in   Vietnam  through  a  commercially  viable  business  model  
  23. 23. Business  Plan   i.  ii.  iii.  iv.  Business  Model     Production  Plan     Sales  &  Marketing  Strategy   Risk  Management                  
  24. 24. Business  Model   i.  ii.  iii.  iv.  v.  Strategy   Key  Partners   Value  Proposition  for  Key  Partners   Business  Model  Design   Critical  Success  Factors  
  25. 25. Strategy           ¨  ¨  ¨  Pilot  Phase                                      Phase  3   Phase  2   Social   Benefits   of  HWD   Phased  Approach:  A  transition  period  from  a  non-­‐profit  to  commercial  venture   Pilot  Phase:  Launch  covers  limited  geographic  areas,  but  commercially  driven  in   order  to  verify  the  operation  model  and  to  obtain  market  segment  insights   Transition  of  Ownership:  Aim  to  complete  the  transition  right  after  the  first  pilot   phase.  Depending  on  the  situation,  it  may  be  required  to  add  additional  phases   before  transitioning  into  the  for-­‐profit  business Phased  approach:  From  non-­‐profit  to  profit  
  26. 26. Key  Partners  &  Business  Model  Diagram   Participating   Steering  Committee/   Board   Place  Order   Social  Venture   Partner   Funding   Manufacturer   Train/Manage   Women  Union   FMCG,  NGO,  donors     provide  start  up   funding   Distribute   WU  Happy  Team   Pay   End  Consumer   Sell   Entity    that  manages   product    manufacturer,   Women s  Union   Relationship     (Sales  channel)     Women s  Union  in   different  tiers  
  27. 27. Key  Partners   WOMEN S  UNION   ¨  ¨  ¨  Promotes  gender  rights   and  women s  issues   IDE   ¨  13  million  members   Leverage  members   network  to  sell  HWD   ¨  ¨  NGO  specializing  in   supply  chain  and   demand  creation   Lead  the  project  during   the  pilot  phase   Leverage  know-­‐how  of   market  dynamics   across  rural  Vietnam   MANUFACTURER   ¨  ¨  Leverage  distribution   network  to  further   market  HWD     New  product  line  and   revenue  stream  for   manufacturer  
  28. 28. Key  Partners  (2)   FINANCIAL  INVESTORS   ¨  ¨  ¨  Provides  start-­‐up  capital   Offers  management  and   financial  know-­‐how   Insights  into  corporate   governance   FMCG  PARTNER   ¨  ¨  ¨  Provides  insights  into  the   personal  care  market  in   Vietnam   Provides  in-­‐kind  product   for  promotion  which  will   boost  HWD  sales     Mutually  beneficial   relationship  with  HWD  
  29. 29. Value  Proposi@on  for  Key  Partners        Outcome      Contribution   Women’s  Union   • Improve  hand  hygiene  and   decrease  incidence  of  disease   • Increase  members’  income   • Preparation/Pilot  for  self-­‐ funded  initiatives     • Create  the  demand  for  HWD   • Sales  network   • Sponsorship/financing   initiatives       • Channel  and  distribution   support   Water  and   Sanitation  Program     •   Achieve  Hand  Washing   Initiative  objectives   • Start-­‐up  funding   • Oversight  until  Nov  2011   • Manage  relationship  with   Ministry  of  Health   WaterSHED   • Achieve  Hand  Washing   Initiative  objectives     • Test  case  for  other  countries   • Start  up  funding   • Oversight  
  30. 30. Value  Proposi@on  for  Key  Partners  (2)      Expectation      Contribution   International   Development   Enterprises  (”IDE”)   • Achieve  Hand  Washing   Initiative  objectives  in  a   commercially  viable  way     • Start-­‐up  funding   • Project  ownership   • Business/sales  training  to   WU  members   • Supply  chain  management   FMCG  MNC   • Branding   • Increase  soap  sales   • Increase  market  share   • Meaningful  CSR  initiative   • Start-­‐up  funding  support   • Product  donation  for  co-­‐ branding  promotion   • Sales  training   • Market  intelligence  
  31. 31. Business  Model:  Pilot  Phase   Steering   Committee   HWD  Initiative  (Department  within  IDE)     Women  Union   Members   Rural   Households   Formed  by  IDE,  and  other  stakeholders.  Responsible     for  reviewing  progress,  milestones  and  fund  usage.     In  charge  of  daily  operation  and  project  execution   including  supply  chain  management  and  WU  liaison   Leveraging  WU  members  network  to  initiate  HWD   pilot  project  to  rural  customers   Delivering  an  affordable  product  to  the  end  user   and  gathering  feedback  in  terms  of  design  and   function  prior  to  Phase  2  
  32. 32. Pilot  Phase:  Implementa@on  Strategy   Today   Execute   Contract  With   Partners   3  months   Form   Steering   Committee   Raise   Startup   Funds     6  months   Organize   Management   Team   Manage   Project   Finalize   Design  of     Product   Design   Sales  &   Distribution   Processes   Manufacture   Products   Develop   Implementation   Plan  with   Partners  (WU)   Build/Lend   Warehouse   Facilities   Develop   Sales  Training   With   Partners   Deliver  &  Store   Inventory   Execute   Implementation   with   Partners  (WU)  
  33. 33. Pilot  Phase:  Steering  CommiYee   Steering  Committee   ¨  ¨  Includes  representatives  from  WU,  IDE  and  other  partners  in  the  HWD  Initiative   To  seek  financial  sponsorship  from  IDE,  FMCG  MNC,  WSP  and  other  NGOs  to   fund  HappyTap  Initiative   ¨  To  leverage  on  WU  members  to  promote  HWD     ¨  To  negotiate  and  manage  relationship  with  manufacturers   IDE  Role  and  Deliverables   ¨  IDE  to  lead  pilot  project  –  HWD  Initiative   ¨  IDE  together  with  WU  or  third  party  will  provide  training  to  the  sales  force   ¨    Upon  success  of  the  project,  the  HWD  will  be  introduced  to  more  rural  customers   in  Vietnam  via  introduction  of  Phase  2  
  34. 34. Pilot  Phase:  Role  of  Women s  Union   ¨  Women s  Union  Support  for  various  aspects  is  critical:   ¤  ¤  ¤  Political:  The  program  can  become  a  showcase  for  the  Women   s  Union   Health:  Lobby  Women s  Union  to  use  HappyTap  as  a  measurement  of  success   of  the  Hand  Washing  Initiative   Financial:  Commission  scheme  to  Women s  Union  and  the  HappyTeam   Margin   Translate  into  Work   hours   Translate  into  Headcount   Cost/Per  Annum   10%   ¤  Revenue   $57,500*   115,000   48   Strategy:  Convince  Women s  Union  that  the  initiative  can  be  a  test  case  to  set   up  future  sustainable  social  business  entities     *        Assumption:  230,000  units  are  sold  for  the  first  2  years;  $0.50  hourly  pay/$  600  annual  pay.  $0.25  per  device   sold  goes  to  Women s  Union  
  35. 35. Pilot  Phase:  Cri@cal  Assump@ons   ¨  The  sales  agent  makes  enough  income  to  support  and  endorse  the  program   Retail  Price   No.  of  Monthly  Sales   Income   %  of  income*   $6   18%   6   $6   12%   $6   18%   7   $7   14%   $6   18%   8   $8   16%   $6   18%   9   $9   18%   $6   18%   10   $10   20%   $6     Margin     18%   12   $12   24%   *Use  $  50  as  average  monthly  income  (between  VND955K  in  TG  Province  and  VND828K  in  HY  Province);  Source:  Result  of  the   survey  on  Household  Living  Standards  2008,  General  Statistic  Office,  Vietnam     ¨  The  Happy  Team  will  treat  the  sales  of  HWD  as  a  significant  income  stream     ¨  Sales  should  increase  income  by  14%-­‐20%  to  make  the  Happy  Team  viable    
  36. 36. Business  Model:  Phase  2  &  3   Invite  Pilot  Phase  partners  to  participate  in  the  new  share  holding  structure   Women s   Union   Work  with  IDEO  to   develop  other   personal  care   products   IDE   FMCG  MNC   HWD  Pte  Ltd   iWash  Ltd   Women  Union   Members   Rural   Customers   Manufacturer   Other  Financial   Investors   Submit  the  fund  raising   proposal  to  partners   investment  department   Continue  to  leverage  on  WU  members   network  to  market  HWD  to  rural  households  
  37. 37. Phase  2  &  3:  Ra@onale   ¨  ¨  ¨  ¨  ¨  ¨  Start  up  capital  provided  by  the  aforementioned  investors     Women s  Union  will  provide  access  to  its  members  network   Manufacturer  will  help  brand  the  products  to  make  it  more   attractive  for  rural  customers     MNC  will  provide  market  intelligence  and  strategic  planning   for  the  company   IDE  will  promote  and  facilitate  the  successful  launch  of  HWD     IDE  and  Women  Union  will  continue  to  train  the  sales  staff   Alignment  of  shareholder  interests  is  key  
  38. 38. Business  Model  Roadmap   Pilot  Phase  (1  Year)     Phase  2  (1  Year)   Phase  3  (3  Years)   Objective   •  Promote  HWD  into  rural   household  commercially   •  Create  a  social  venture  with  key   stakeholders  in  Vietnam   •  To  continue  to  grow  via   introduction  of  new  hygiene   and  public  health  products     e.g.  septic  tank   Management  &  Governance     •  Steering  Committee  with   Project  management   Office     •  Raise  fund  and  transforming  to   a  share  holding  structure   •  •  Corporate  Governance   Preparation  for  Initial  Public   Offering     •  Expand  from  rural  areas  to   urban  areas     Expand  from  Vietnam  to   other  countries     Business  Model   •  •  Secure  funding    support  for   the  initial  launch  of  HWD   Leverage  WU  network  an   effective  sales/distribution   network   •  Utilize  the  proven  business   model  and    network   resources  to  expand  from   HWD  to  other  households   products  that  bring  social   economic  benefits  to  rural   households     • 
  39. 39. Cri@cal  Success  Factors   Pilot  Phase  (1  Year)   1.  2.  3.  4.  5.  6.  Funding  Support  for  start   up   Endorsement  from  WU  HQ   to  make  HWD  a   measurement  of  success  for   HW  initiative     Women  Union  Performs  in   distribution  and  sales   network   The  sales  force  makes   money   Provide  good  quality  and   distribution  capability   Project  management     Phase  2  (1  Year)   1.  2.  3.  4.  Intention  for  WU  to  set  up  a   social  enterprise  under  JV   structure     Optimize    the  sales/   distribution  network   Demonstrate  the  successful   business  case    so  to  get  the   interests  from  the  potential     investors     Buy  in  from  the  Investors   and  Sound  Business  Plan   Phase  3  (3  Years)   1.  2.  3.  Introduce  HWD  to  all  parts   of  Vietnam   New  product  introduction   Replicate  Business  Case   regionally  
  40. 40. Sales  &  Marke@ng  Strategy   i.  ii.  iii.  iv.  v.  vi.  Opportunity   Target  Market                 Value  Proposition  &  Brand  Strategy   Sales  Process   Implementation  Strategy   Sales  Projections    
  41. 41. Sales  Opportunity   ¨  Potential  market  for  hand  washing  device  is  $96  million     ¨  Leverage  powerful  nationwide  partners  to  drive  sales       ¨  First  year  sales  will  surpass  100,000  units     ¨  Exclusive  co-­‐branding  for  private  partner  
  42. 42. Market  Research  Focus     ¨  ¨  ¨  Current  hand  washing  situation  in  Vietnam?   What  are  the  hygiene  risks  associated  with   hand  washing  without  soap?   What  are  some  of  the  effective  ways  to   promote  hand  washing  behavior  change?   ¨  What  are  a  few  of  the  possible  solutions?   ¨  What  should  be  the  target  market?   ¤  ¤  Geographic     Demographic       ¨  What  would  be  a  good  user-­‐friendly  design?     ¨  What  is  the  potential  market  demand?  
  43. 43. Market  Research  Key  Findings     ¨  Low  hygiene  standards:   ¤  ¨  Rural  women s  aspirations:   ¤  ¤  ¨  Children s  wellbeing  and  future  is  a  primary  motivation     Desire  to  provide  better  lives  for  the  family   Demand  of  device  in  rural  areas:   ¤  ¤  ¤  ¨  In  rural  areas,  only  8.6%  of  the  population  has  a  water  source  inside   the  household   No  access  to  water  near  latrine  or  kitchen   Need  for  a  clean  water  source   Easy  reminder  to  hand  wash   Critical  hand  washing  junctures   ¤      Toilet  use,  food  preparation,  baby  changing,  animal  handling  
  44. 44. Target  Market   Consumer    Demographics   ¨  ¨  ¨  Monthly  income  US$50-­‐US$70   per  capita   Rural  households  with  children   under  5   Potential  institutional  customers   ¤  ¤  ¨  ¨    Rural  health  stations/hospitals   Universities,  schools   Potential  corporate  customers   Commercial  farms,  private   hospitals,  etc   Geographical  Focus   ¨  Nationwide     ¨  Rural  areas   ¨  Commune  level  
  45. 45. Visual  Iden@ty  
  46. 46. Price  Point   ¨  ¨  Focus  groups  and  field  research  conducted  by  WSP,  IDE,  IDEO,  and  GIFT   showed  that  end-­‐user  willingness  to  pay  for  the  device  is  $5  -­‐  $7   HappyTap  will  be  marketed  as  more  than  just  a  hygiene  product  and  to   reflect  that  price  point  is  set  at  $6   Price  point  must  reflect  true  economic  value  
  47. 47. Vietnam  Women s  Union   ¨  Engage  Vietnam  Women s  Union  to  take  ownership  of  the   sales  process  in  year  one   In  line  with  their  mission  to  empower  Vietnam s  women  to   work  creatively,  improve  their  material  lives,  &  nurture  happy   families   ¤  A  national  network  that  includes  13  million  members  and  spans   all  63  provinces,  500  districts,  and  11,000  communes   ¤  Already  a  key  partner  in  executing  the  ongoing  Vietnam  Hand   Washing  Initiative   ¤  Women s  Union  is  the  ideal  distribution  partner
  48. 48. Vietnam  Women s  Union   ¨  ¨  As  well  as  having  extensive  reach,  the  WU  is  an  influential  and   trusted  body  for  women  nation-­‐wide   Although  not  it s  main  function,  the  Women s  union  has  been   successful  in  a  number  of  commercial  ventures   ¤  ¤  ¤  ¨  Domestic  &  regional  tourism   Rural  sanitation  marketing  &  latrine  sales   Microfinance    After  trial  phase  WU  will  have  option  to  set  up  a  new  venture   ¤  Expand  coverage,  product  lines,  and  sales  force   Project  will  build  capacity  within  Women s  Union  for  future   commercial  ventures
  49. 49. The  Happy  Team   ¨  Within  each  commune  WU  has  a  15  member  executive  board   ¤  ¨  In  exchange  for  the  benefits  attached  to  HappyTap,  a  project  partner  will   provide  WU  training  to  equip  the  Happy  Team  with  the   sellers  toolkit   ¤  ¤  ¨  These  are  the  champions,  the  sales  agents  –  The  Happy  Team!   Commercial  knowledge   Sales  &  Bookkeeping  skills   Innovative  distribution  model  means  $1.25  incentive  per  device  can  be   offered  to  WU   ¤  ¤  $0.25  to  the  organization   $1  to  the  individual  (12%-­‐24%  increase  in  monthly  household  income  based   on  sales  agents  current  average  earning  of  $50/month)   Distribution  partnership  is  a  win-­‐win!
  50. 50. The  Sales  Process   1.  Manufacturer   Ships  product  to   Women s  Union   2.  Coordination  /support  from  IDE   3.  Women s   Union  sends   product  out  to     Happy  Team   Women s  Union  can  finance     purchase  of  HappyTap   4.  Happy  Team  promotes   and  sells,  receives  incentive   ✚ 6   5  
  51. 51. The  Marke@ng  Mix   Mass  Media   ¨  WSP   ¤  ¨  ¨  Feature  in  hand  washing   initiative  campaign   Women’s  Union   ¤  ¤  Private  Partner   ¤  ¨  Direct  Marketing   Mention  in  TV  commercials   ¤  Women s  Union   ¤  ¤  Radio  loudspeaker  throughout   region     ¨  Hand  washing  activities   Monthly  meetings  &  other   scheduled  events   Household  visits   Internal  communications   Private  Partners   ¤  Grass-­‐roots  activation   Low  cost,  High  impact
  52. 52. Private  Marke@ng  Partner  Support   INPUT   PRIVATE   SECTOR   PARTNER   BENEFITS   §   Seed  Funding   §   In-­‐kind  product:   §   100,000  Soap  bars   §   Training  for  the  Happy  Team   §   Integra@on  into  exis@ng   marke@ng  campaign     §   Exclusivity   §   Brand  Awareness   §   Trial   §   Increased  Penetra@on   §   Future  sales   §   Posi@ve  Social  Impact:   §   Follows  Hindustan  Lever   “Shak@”  model     Contribute  to  community  and  boost  sales
  53. 53. Co-­‐Branding  Opportunity   Women s  Union  and     First  50,000  units  will  be     private  partner    enjoy     offered  with  two  free  soap  bars   co-­‐branding  on  HappyTap           ✚ SOAP SOAP Achieve  brand  association  and  encourage  product  trial  
  54. 54. Implementa@on  Strategy:   Pilot  Phase  Objec@ves   ¨  ¨  After  the  Pilot  Phase,  we  expect  to   collect  the  following  market  data   Differences  between…   ¤  Northern  Region  (Hung  Yen)  and   Mekong  River  Delta  Region   (Teng  Giang)   ¤  ¤  ¤  ¤  Income  levels  of  end  user   Household  with  kids  and   without  kids   Product  as  a  whole  or  only  top   portion   Household  where  water   infrastructure  is  available  or  not   available  
  55. 55. Implementa@on  Strategy:   Pilot  Phase  Ini@al  Target  Area   Selection  Principles   ¨  ¨  ¨  ¨  Align  with   Women’s  Union   At  least  two     regions   Women’s   Union  Rep.   Social     Enterprise   North  and  South   Handwashing   initiative  ongoing   WU   Province   WU   Dist.   WU   Com.   WU   Dist.   WU   Province   WU   Dist.   WU   WU   WU   Com.   Com.   Com.   WU   Dist.   ・・・ 2  provinces          (Teng  Giang,  Hung  Yen)   •  4  districts        (2  in  each  province,  TBD)   •  All  communes  under  selected     districts  (around  80  comm.  total)   •  •  120,000  households   Total  
  56. 56. Implementa@on  Strategy:   Sales  Area  Expansion   Plan  to  reach  600,000  households  by  Phase  2,  3,360,000  by  Y5   ¨  Phase  2   ¤  By  adding  new  districts  within  the  same  province   For  new  province,  start  in  2  districts,  then  expand   to  all  remaining  districts  within  the  province.   ¤  Expand  to  adjacent  districts/provinces  first   ¤  ¨  Phase  3   ¤  ¤  Nationwide   Different  Countries  (i.e.  Cambodia,  Laos)  
  57. 57. Sales  Forecast  –  Assump@ons   ¨  Penetrate  2  new  Provinces  each  year  in  Yr  1  and  Yr  2   ¤  ¨  ¨  ¨  ¨  Thereafter,  3  new  Provinces  in  Yr  3  and  Yr  4  respectively,  and  4  new   Provinces  in  Yr  5   8  districts  will  be  targeted  in  each  province,  starting  with  2  in  the   first  half  of  the  year,  and  6  in  the  second  half   Within  each  district,  20  communes  will  be  targeted   There  are  on  average  1,500  households  in  each  commune   8  sales  agents  will  be  appointed  in  each  commune  to  create   awareness  of  the  HWD   Over  3  million  households  will  be  reached  by  Year  5  
  58. 58. Sales  Forecast  –  Assump@ons  (2)   ¨  ¨  Through  the  sales  agent  network,  it  is  estimated  that  48   households  will  be  reached  every  month  by  each  sales  agent;  in  4   months,  all  our  target  market  in  one  commune  will  be  reached   Market  Penetration      (calculated  as  %  of  households  buying  one  HWD  out  of  the    total  no.  of   households  reached  in  each  commune)     By  end  of   Yr  0.5   Yr  1   Yr  1.5   Yr  2   Yr  2.5   Yr  3   Yr  3.5   Yr  4   Yr  4.5   Yr  5   Base   20%   28%   29%   30%   31%   32%   33%   34%   35%   36%   Best   25%   32%   33%   34%   35%   36%   37%   38%   39%   40%   Worst   10%   13%   14%   15%   16%   17%   18%   19%   20%   21%  
  59. 59. Sales  Volume  Projec@ons   ¨  No.  of  HWD  sold  (Cumulative)       Phases   Pilot   Phase  2   Phase  3     By  end  of   Yr  0.5   Yr  1   Yr  1.5   Yr  2   Yr  2.5   Yr  3   Yr  3.5   Yr  4   Yr  4.5   Yr  5   Base   24,000   105,600   159,600   246,000   316,800   448,800   539,400   678,600   788,400   975,600   Best   30,000   128,400   184,800   288,000   364,200   521,400   615,600   780,000   896,400   1,117,200   Worst   12,000   51,600   75,600   120,000   154,800   223,800   437,400   513,600   572,400   675,600   Huge  market  potential:  1  million  units  will  be  sold  by  Year  5    
  60. 60. Opera@onal  Plan     i.  ii.  i.  ii.  iii.        Supply  Chain     Sourcing  &  Fulfillment   Distribution  &  Logistics   Inventory  Management   Partner  Selection  Criteria  
  61. 61. Supply  Chain   Soap   Partners   $$$   Sales  training   Monetary  Input   Payment  for    purchase   Enterprise   $$$   $$$   Revenue   WU   Revenue   Happy   $$$   Team   $$$   End     User   Production  Order+  Mold(1  time)   Manufacturer   HappyTap   Soap  +   HappyTap   Soap  +   HappyTap   Enterprise  takes  ownership  of  product  until  sale  is  made  
  62. 62. Sales  and  Opera@ons  Plan  (S&OP)   ¨  ¨  S&OP  is  the  alignment  of  demand,  supply  and  financial  resources     Benefits:   ¤       Maximize  Utilization  of  Plant  and  Equipment   ¤       Minimize  Costs/Maximize  Profits        Minimize  Changes  in  Production  Rates        Minimize  Changes  in  Workforce  Levels   ¤       Minimize  Inventory  Investment         ¤  ¤  Demand  and  supply  should  be  aligned  
  63. 63. Produc@on  Capacity   Production Capacity vs Sales Forecast 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 PILOT PHASE PHASE I PHASE II Increased Production Capacity Production Capacity Sales Forecast Y0- Y0- Y0- Y0- Y1- Y1- Y1- Y1- Y2- Y2- Y2- Y2- Y3- Y3- Y3- Y3- Y4- Y4- Y4- Y4- Y5- Y5- Y5- Y5Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Production Capacity Sales Forecast Forecast  shows  additional  capacity  is  available  
  64. 64. HappyTap  Product  Requirements   ¨  ¨  ¨  ¨  ¨  ¨  ¨  High  Quality   Low  cost   Flexible,  highly  durable     UV  Resistance  for  permanent   outdoor  application   Possible  Transparency  of  water   container   Water  tightness   Color  modification  
  65. 65. HappyTap  Assembly   No   Name   Weight   Proposed   (gram)   Material   1   Water  Container   776   HDPE/PP   2   Container  Lid   222   PP   3   Container  Stand   660   PP   4   Valve  Spout   48   PP   5   Valve  Spray  Bar   10   PP   6   Valve  Handle   7   Valve  Nut   2   open   8   Valve  Ball   5   open   9   Valve  Washer   2.6   open   10   Valve  Core   2.5   open   11   Valve  Connector  1   30   open   12   Valve  Connector  2     52   open   10.1   PP   Design  and  product  features  have  not  been   finalized  
  66. 66. Distribu@on  Model   Production   Women’s  Union   Province Level District Level Commune Level Happy  Team Households  
  67. 67. Distribu@on  and  Logis@cs   Production Program Owner Province WU District WU Commune WU Happy Team End User Enterprise ¨  Program  Owner  instructs  production  to  manufacture  HappyTap   ¨  Products  are  manufactured  and  stored  at  factory   ¨  Products    are  distributed  to  Women  Union’s  district  headquarters   ¨  ¨  Women  Union  district  headquarters  store  inventory  for  sale  and  remain  in   charge  of  distribution  to  communal  headquarters   Happy  Team  sales  force  is  expected  to  manage  transportation  from   communal  headquarters  to  the  end  users    
  68. 68. Inventory  Management     Production Social enterprise Province WU Production Inventory District WU Happy Team End User Commune WU Enterprise ¨  Ownership:  Social  enterprise     ¨  Storage:     Mass  Inventory:  at  production  site   Inventory  for  frontline  sale:  at  targeted  WU  district  office   ¤  ¤  ¨  Inventory  Management:     District  WU:  maintains  sufficient  inventory  for  sales     Province  WU:  consolidates  districts’  orders  to  Social  enterprise   Social  enterprise:  manage  production,  inventory  and  distribution  flow   Production:  distribute  product  by  owner’s  order   ¤  ¤  ¤  ¤                               *  Above  flow  applicable  to  all  phases    
  69. 69. Manufacturing  Partner  Selec@on  Criteria   ¨  Required   ¤  ¤  ¤  ¤  ¤  ¤  ¤  Manufacturing  experience  in  plastic  products   Ability  to  meet  production  capacity  and  quality  standards   Scalability    and  expansion  capacity  of  workforce  and   production   Established  distribution  network   Ability  to  meet  the  security,  privacy  and  intellectual  property   requirements   Availability  of  storage  space   Humanitarian:  No  usage  of  child  labor  in  the  entire   production  process     ¨  Preferred   ¤  ¤  ¤  ¤  Ability  to  support  the  required  cost  for  catalogues  and/or   shelf  space  and  more   Ability  to  support  the  chain  with  education  and/or   information   CSR  friendly  processes  used  throughout  production   Company  Website  
  70. 70. Risk  Management   i.  ii.  iii.        Risks  &  Mitigation   Contingency  Plan   Exit  Strategy  
  71. 71. Risks  &  Mi@ga@on   Risks   ¨  Ownership  Structure   ¤  ¨  ¨  Negative    association  with   multi  level  marketing   Sales  &  Marketing   ¨  ¨  Phase  2  &  3  are  contingent   on  the  success  of  Pilot  Phase   Potential  Social  Issue     ¤  Mitigation   Contingent  on  WU  sales  &   marketing  capability   ¨  ¨  Monitor  sales  progress   closely  and  make  appropriate   adjustments   Seek  legal  advice  from  local   law  firms  and  WU   Provide  regular  training  and   monitoring    
  72. 72. Risks  &  Mi@ga@on  (2)   Risks   ¨  Business  Partners   ¨  ¨  Usability   ¨  ¨  Value  proposition  may  not  be   well  understood  by  pure   financial  investors   Mitigation   ¨  ¨  The  product  may  not  be  user   friendly  which  may  result  in   poor  sales   Manufacturer  won t  produce   small  quantities  for    pilot   ¨  Secure  strong  investor  with  long   term  social  view   Collect  market  feedback  and   fine  tune  design  for  newer   version   Need  to  structure  deal  to  take   into  account  future  production  
  73. 73. Con@ngency  Plan   ¨  Women s  Union   ¤  ¤  ¤  ¨  Success  or  failure  is  contingent  on  Women s  Union  commitment  on  the   program   Besides  relying  on  Women s  Union,  we  need  to  seek  other  avenues  to   distribute  HappyTap  commercially   We  may  need  to  consider  OEM  model  and  develop  our  own  sales  channel   Distribution  Network   ¤  ¤  ¤  Ensure  the  Happy  Team  is  properly  incentivized.    We  provide  an  opportunity   for  women  to  increase  their  monthly  household  income  by  25%  if  they   manage  to  sell  10  units  of  HappyTap   Provide  regular  training  and  monitoring  of  sales  target   Besides  WU,    need  to  actively  explore  other  distribution  network  concurrently  
  74. 74. Exit  Strategy     ¨  IDE  to  exit  upon  commercialization  of  HappyTap     ¨  Investors  to  exit  via  trade  sale     ¨  In  the  event  that  HappyTap  does  not  take  off  after  Pilot   phase,  IDE  will  continue  to  house  the  project  through  the   current  organization  structure  or  spin  off  a  new  entity  under   the  IDE  umbrella  
  75. 75. Management  and  Governance   Objectives  of  Governance     General  Governance  Principles   Corporate  Governance  &  Management   i.  ii.  iii.   
  76. 76. Governance  Objec@ves   Governance  plays  the  key  role  of  setting  and  monitoring  the  direction   of  the  organization,  so  as  to  ensure:   ¨  ¨  ¨  ¨  To  administer  the  Plan  and  the  Funds  in  a  prudent  and  cost  effective   manner.     To  prudently  invest  the  Funds  for  long-­‐term  growth  at  a  minimum  level   of  risk.     To  meet  the  objectives  and  expectations  of  the  key  stakeholders.   Organization  works  at  a  high  level  of  professionalism  both  internally  and   externally   ¨  Organization  remains  financially  sound  and  sustainable   ¨  Legal  compliance    
  77. 77. Governance  Principles   ¨  ¨  ¨  ¨  Compliance  with  all  national  laws  relevant  to  the  business.   Fulfilling  socially  obligations  :   ¤  Product  safety.   ¤  Commitment  towards  the  community.   ¤  Commitment  towards  the  partners  and  the  stakeholders.   Management  and  finance  transparency  and  disclosure.   Safeguarding  of  interests  of  various  stakeholders  (shareholders,  board  of   directors,  community  council,  manufacturer  and  employee  etc.)   ¨  Protect  the  reputation  of  all  the  key  shareholders.   ¨  No  political  payments  /  bribery   ¨  All  funding  will  only  be  used  for  the  intended  project  
  78. 78. Corporate  Governance  &  Management:     Pilot  Phase  Governance  Structure   Steering  Committee  Organization   •  •  Women’s   Union   Steering     Committee     Leader:   Ownership  of  HWDs  until  sales  point   •  Manufacturer   Ownership  of  project  as  a  leader  (IDE)     Oversight  of    manufacturing  &  mold   creation   WSP   •  Oversight  of  link  between   manufacturer  &  Women’s  Union   WATERSHED   Inventory  management   c.  FMCG  MNC   Transport  &  Storage  at  (Provincial,   District,  Community)   b.   IDE   a.  Payment  Process   d.  Assurance  of  Key  Success  Factors   e.  Happiness  of  end  users   f.  Training  of  A  team  
  79. 79. Phase  2:  Proposed  Ownership  Structure   Ownership  Concentration  Ratio   New  Entity  setup  -­‐  HappyTap  Ltd.     p  With  the  successful  roll-­‐out  of  pilot   phase,  IDE  will  set  up  the  new  entity.   Shareholders  &  Ownership   p  Women’s  Union  is  offered  sweat  equity   in  new  company  with  contribution  of   sales  and  marketing  efforts  and  network   resources   p  Women’s  Union  takes  the  lead  in  the   new  entity.   p  Other  potential  shareholders  are  FMCG,   Manufacturer  and  other  social  investors.       The  proposal  is  only  based  on  current   assumptions.  Ownership  structure  is   expected  to  be  re-­‐aligned  after  Phase  II.  
  80. 80. Phase  2  &  3:     Proposed  Organiza@on  Structure  
  81. 81. Phase  2  &  3:     Management  System  and  Monitoring   Management  of  system  and  processes   ¨  ¨  To  ensure  stable  and  transparent  processes  are  conducted    Have  system  and  objectives  established  that  are  met  in  alignment  of  the   shareholders  interest     Key  Management  Tools     ¨  Organization  Management   ¤  ¤  ¤    Define  reporting  line  and  escalation  rules   Create  RASIC  chart  (Responsible,  Approve,  Support,  Inform,  Consult)  to   definite  job  responsibilities  on  departmental  and  individual  level   Organize  regular  meetings  on  Board  level,  management  level  and  department   level  to  facilitate  information  flows  and  create  action  plans  to  adjust  business   plans  and  timelines  
  82. 82. Phase  2  &  3:     Management  System  and  Monitoring   Key  Management  Tools     ¨  Process  Management:     ¤  ¤  ¨  Operations  and  Performance  Management     ¤  ¤  ¤  ¨  Operations  guidelines  /  SOP  documentation  on  departmental  level   Define  Reporting  system   Sales  Report,  Stock  Report       Market  Penetration  Analysis   Finance  Balance  Sheet  /  cost  and  profitability  analysis   HR  Management   ¤  ¤  ¤  Staff  Skill  requirement  and  training  development   Staff  engagement  survey   Staff  annual  assessment  
  83. 83. Phase  2  &  3:     Management  Role  of  the  Board   It  is  proposed  that  the  board  of  directors  will  consists  of    6  members  :  4  non   executive  directors  and  2  executive  directors.   ¨  4  of  the  executive  directors  are  shareholders  of  the  HappyTap.   ¨  2  of  the  non  executive  directors  are  from  Women’s  Union.   Selection  of  the  Non  executive  Directors:     ¨  ¨  As  the  women’s  union  played  a  big  role  in  the  sales  of  the  product,  engagement  of  the   communal  interests  and  distribution  of  the  products.  It  is  hence  essential  that  that  the   women’s  union  has  a  role  in  the  BOD.   Women’s  union  shall  act  as  a  voice  of  the  communal  and  align  their  interests  to  the  interests   of  the  share  holders.   Overall  Roles  of  the  Board  :     ¨  They  will  appoint  one  CEO  whose  remuneration  is  decide  by  the  board.     ¨  The  board  ensures  that  all  there  is  equal  rights  for  all  shareholders.   ¨  Exercise  accountability  to  shareholders  and  be  responsible  to  relevant  stakeholders      
  84. 84. Phase  2  &  3:     Management  Role  of  Chief  Execu@ve   ¨  ¨  ¨  ¨  ¨  ¨  ¨  ¨  Develop  strategy  proposals  for  recommendation  to  the  Board  and  ensure  that  agreed   strategies  are  reflected  in  the  business.   Develop  annual  plans,  consistent  with  agreed  strategies,  for  presentation  to  the  Board  for   support.   Plan  human  resourcing  to  ensure  that  the  Company  has  the  capabilities  and  resources   required  to  achieve  its  plans.   Develop  an  organisational  structure  and  establish  processes  and  systems  to  ensure  the   efficient  organisation  of  resources.   Be  responsible  to  the  Board  for  the  performance  of  the  business  consistent  with  agreed   plans,  strategies  and  policies.   Lead  the  executive  team,  including  the  development  of  performance  contracts  and   appraisals.   Ensure  that  financial  results,  business  strategies  and,  where  appropriate,  targets  and   milestones  are  communicated  to  the  investment  community.   Develop  and  promote  effective  communication  with  shareholders  and  other  relevant   constituencies.      
  85. 85. Financial  Plan   i.  ii.  iii.  iv.  v.  vi.  Key  Points     Pricing  Structure   Capital  Requirement   Financial  &  Volume  Projections   Scenario  Analysis   Recommendations  &  Conclusions  
  86. 86. Key  Points   ¨  Financially  attractive  business  proposition  for  the  sales  agent   ¤  Additional  12%  -­‐  24%  income  to  one  household     ¨  Financially  sustainable  business  venture   NPV:  US$  50,000   ¤  Initial  Capital  Requirement:  US$326,500     ¤  ¨  Huge  potential  for  soap  market   ¤  Soap  Sales  Revenue:  US$  2.4-­‐7.5million    
  87. 87. Pricing  Structure   ¨  Retail  Selling  Price                                                $6.00     ¤  Manufacturing  Cost   ¤  Transportation     ¤  Women’s  Union  Margin   ¤  HappyTap  Margin   ¤  Sales  Agent  Margin      $3.57    $0.97    $0.25    $0.21    $1.00     Pushing  sales  through  the  sales  agent  incentive!  
  88. 88. Capital  Requirement   ¨  Initial  Capital  Requirement:                                          $326,500       ¤  Molds:     ¤  50,000  units:   ¤  Management:   ¤  Branding:   ¤  Others:     ¤  Year  5  additions                $103,000    $  178,500    $      20,000    $      20,000    $            5,000    $  426,000  
  89. 89. 2011-­‐2016  Projec@ons   ¨  Profit  &  Loss  Projections:     Year  1   Year  2    Revenue   633,600   842,400 1,216,800 1,378,800 1,782,000         126,720   168,480   243,360   275,760   COGS   Gross  Profit   Marketing    &   Transport   376,992   501,228   723,996   820,386   1,060,290   129,888   172,692   249,444   282,654   365,310   102,432   144,612   208,884   236,694   305,910   27,456   28,080   40,560   45,960   59,400   Trade  Margin     Net  Profit   Year  3   Year  4   Year  5   356,400  
  90. 90. Financial  Evalua@on:  Summary   7-­‐year  funding  required:    $    752,500   ¤  Initial  Capital:   ¨   $    326,500    $    426,000     ¤  Additional  Capital: p      Net  Present  Value:    $50,000     ¨  Payback  Period:  7  years  
  91. 91. 50%   1,000,000   No.  of  HWD  sold   1,200,000   40%   800,000   30%   600,000   20%   400,000   10%   200,000   0   0%   Yr  0.5   Yr  1   Yr  1.5   Yr  2   Yr  2.5   Yr  3   Yr  3.5   Yr  4   Yr  4.5   Yr  5   By  the  end  of  each  period   Sales  Projections   Market  Penetration     High  growth  rate*  of  74%  p.a.  is  achieved   *Growth  rate  is  calculated  as  the  Compound  Annual  Growth  Rate  for  the  5-­‐year  period.     %  Market  Penetration   Sales  Volume  Projec@ons  –  Base  Case
  92. 92. 1,200,000   50%   1,000,000   40%   800,000   30%   600,000   20%   400,000   10%   200,000   0   Worst  Case   1,200,000   No.  of  HWD  sold   ¨  0%   50%   1,000,000   40%   800,000   30%   600,000   20%   400,000   10%   200,000   0   0%   Yr  0.5   Yr  1   Yr  1.5   Yr  2   Yr  2.5   Yr  3   Yr  3.5   Yr  4   Yr  4.5   Yr  5   By  the  end  of  each  period     Sales  Projections   Market   ate   Under  the  worst  case,  market  penetration  Prenetration  of  21%  is   maintained       %  Market  Penetration   Best  Case   No.  of  HWD  sold   ¨  %  Market  Penetration   Volume  Projec@ons  Sensi@vity  Analysis
  93. 93. Scenario  Analysis   % Change 10 Best 5 Base 0 HWD Volume Sales Agent NPV Soap Volume Worst -5 HWD  Volume   Sales  Agent   NPV   Soap  Volume   Best  Case   1,117,000   USD  8/mo   423,000   28,750,000   Base  Case   975,000   USD  6/mo   50,000   25,000,000   Worst  Case   675,000   USD  3/mo   (48,000)   17,500,000  
  94. 94. Recommenda@on   ¨          Due  to  the  benefit  earning  all  parties  a  win-­‐win  ;  better  health  and   hygiene  to  villagers,  extra  income  to  women  in  rural  areas,   accomplishment  of  IDE  and  public  partners  mission,  business   opportunity  and  brand  recognition  for  plastic  manufacturer  and     FMGG,    recommendations  are:     ¨        ¨  Women’s  Union  resources  can  be  extensively  utilized  to  contribute  to   the  success  of  the  project.   Project  to  be  broken  into  phases  as    to  ensure  efficiency  and  reduce   risk  of  failure.  
  95. 95. Conclusion   ¨  This  enterprise  has  the  ability  to  raise  considerable  hygiene  awareness   amongst  Vietnam’s  poorest  communities,  whilst  providing  a  sustainable   social  investment  platform  for  the  region.       ¨  Furthermore,  sales  agents  commissioned  to  distribute  the  products  are   also  able  to  create  income  for  their  households.     ¨  In  addition  to  the  social  and  monetary  value  created  in  the  rural   population,  the  venture  is  able  to    significantly  propagate  interest  in  the   lagging  local  soap  market.       ¨  As  a  result,  the  soap  industry  will  greatly  benefit  from  additional  revenue   creation.  
  96. 96. Appendices   i.  ii.  iii.  Key  Assumptions   Payment  Process   Financial  Spreadsheets  Attached  
  97. 97. Key  Assump@ons   p  p  p  p  p  Year  zero  is  based  on  the  6  month  pilot  phase  for  testing  and   redesign   Molds  purchased  in  year  zero,4  &  5:  production  capacity  per  mold   up  to  400,000   Sufficient  production  capacity  in  delivering  sales  until  year  5   COGS  comprise  of  labor,  raw  material,  injection  molding  press   time,  packaging,  other  overheads  and  manufacturer’s  profit   margin   Marketing  expenses  amount  to  1%  of  sales  
  98. 98. Key  Assump@ons   ¨  HWDs  will  be  distributed  every  month  to  the  WU   ¨  Happy  Team  sales  agents  current  income  on  average  is  $50/month  which   allows  for  sufficient  incentive  of  $6/mo  from  HappyTap  sales     ¨  Minimal  storage  space  is  required  and  WU  office  will  be  leveraged   ¨  Just-­‐In-­‐Time  inventory   ¨  Assumed  tax  free  entity   ¨  NPV  is  based  on  initial  funding  amount   ¨  Discount  rate  10%  up  to  15  years  
  99. 99. Payment  Process:  Phase  1   COD   Production   Program   Owner   50%  deposit  and     50%  upon  delivery   (30  days  credit)   WU    Province   WU   District   WU   Commune   Happy   Team   End  User   Consignment  (30  days  credit)  
  100. 100. Payment  Process:  Phase  2  &  3   Payment  with  credit     for  1  month  curtained  period   Production   Program   Owner   WU    Province   COD   WU   District   Payment  with  credit     for  1  month  curtained  period   WU   Commune   Happy   Team   End  User   Consignment  (sellers  pay  for   goods  sold  on  a  monthly  basis)    

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