From Pilot To Platform in Rural Pakistan - Case For First Class

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case W22C48
Ted London February 3, 2023
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Lisa Jones Christensen
From Pilot to Platform in Rural Pakistan:

A Uniquely-Owned Company Scales to Change Lives
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“By 2025, more than half of the world’s population will have joined the consuming
classes, driving annual consumption in emerging markets to $30 trillion. RB is
playing an important role in introducing these new consumers to the economy
through the development of innovative products for consumers at the bottom of
the pyramid, who represent some of the most discerning customers in the world...”1
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—Reckitt Benckiser CEO Rakesh Kapoor
Fahad Ashraf, the chief executive of Reckitt Benckiser (Reckitt)i Pakistan, and Ayesha Janjua, head
of marketing at English Biscuit Manufacturer (EBM) in Pakistan, poured themselves fresh cups of tea as
they waited for the boardroom to empty. A board of directors meeting for Saaf Sehatmand Services (SSS)
in Karachi, Pakistan, had just ended. Ashraf and Janjua wanted to stay behind to discuss next steps. While
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both were pleased with the meeting’s progress, several strategic questions remained. If not addressed in a
timely and effective manner, these issues could stall SSS’s innovative approach to helping local women sell
branded health, hygiene, and safe food products in rural Pakistan.
Saaf Sehatmand Services (where “Saaf” meant clean and “Sehatmand” meant healthy) was a for-proft
business co-owned by six different parties: Reckitt, EBM, three other companies, and the largest not-for-
proft rural outreach network in Pakistan. Ashraf, the earliest and strongest proponent of SSS, was board
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chairman and Janjua served as pro-bono CEO. Other board members were senior leaders from business and
non-proft communities. They had come together in 2019 with the goal of creating a basket of goods that
low-income entrepreneurial women could sell in rural communities. By doing so the women could earn a
living while also achieving health improvements in their communities. If successful, this new joint platform
i
Reckitt Benckiser was formed by the merger of Reckitt & Colman and Benckiser in 1999. After the merger, the frm was simply known
as RB, until the frm rebranded to Reckitt in 2021. This document refers to the company as “Reckitt “to refect current frm branding,
although it was known as RB during in-country data collection in 2019.
Published by WDI Publishing, a division of the William Davidson Institute (WDI) at the University of Michigan.
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© Ted London and Lisa Jones Christensen. This case was written by Ted London, Ford Motor Company Clinical Professor of Business
Administration at the University of Michigan’s Ross School of Business, and Lisa Jones Christensen, Associate Professor of Organizational
Behavior and Human Resources at Brigham Young University’s School of Business, with support from research assistant Jillian Rogers.
The authors would also like to thank Tom Harrison, Lizzy Fitzgerald, Corinna Hornwall, Nabeel Raza, and Iftikhar Moghal of the Business
Innovation Facility, a program funded by UK Aid, for their input and support in developing this case. The case was prepared as the basis
for class discussion rather than to illustrate either effective or ineffective handling of a situation. The case should not be considered
criticism or endorsement and should not be used as a source of primary data. The case was reviewed and approved by a representative
of the Business Innovation Facility before publication. See note at the end of the case for additional information.
This document is authorized for educator review use only by Saif Maqbool, National University of Computer and Emerging Sciences until Jan 2024. Copying or posting is an infringement of
copyright. Permissions@hbsp.harvard.edu or 617.783.7860
From Pilot to Platform in Rural Pakistan: A Uniquely-Owned Company Scales to Change Lives W22C48
would accomplish what individual fast moving consumer goods (FMCG) companies had struggled to achieve:
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reach scale in serving rural, low-income markets in a proftable and sustainable manner.
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Designed as a service company that never took possession of any products, SSS was pioneering in
many ways. Innovative elements of the company included: 1) It is a frm where multiple FMCG companies
had an equity stake; 2) It has a charter that allows SSS to be economically self-sustaining rather than
proft-maximizing; 3) It made a non-proft, motivated by social goals, the largest shareholder; 4) It has a
shared governance plan that includes pro-bono rotated leadership; 5) All members use a single distribution
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partner; 6) It sells only socially-benefcial products (a strictly health and hygiene basket), and 7) It is
willing to challenge social norms regarding women’s roles in rural Pakistan.
As the other SSS board members left the room, Ashraf and Janjua began by reviewing their collective
experience in trying to reach the 125 million rural Pakistanis currently not part of the business model for
FMCG companies. Much of this experience had been through Project HOPE (Healthier Opportunities through
Product Innovation and Education), a pilot project led by Ashraf and colleagues at Reckitt. So far, the pilot
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indicated that women living in the rural areas could proftably sell products in their communities—while
also improving the health of customers and making money for the product partners. Yet, the challenges of
Project HOPE in helping 36 women serve 19,000 households across 27 villages were magnitudes smaller
than those associated with building a nationwide program to reach millions of rural Pakistanis. Furthermore,
SSS was led by executives who were more used to competing than collaborating, and the non-proft partner
operated with a different mission and organizational culture.
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How could this board “future proof” the new company to ensure its economic sustainability, as well
as its ability to beneft the women sales agents and their customers in rural Pakistan? What should the
leadership team do next to enable this innovative company and its path-breaking approach to scale
throughout Pakistan? SSS had to be more than another pilot project; success required achieving scale. As
Ashraf and Janjua pondered how to move forward, they refected on how far they had come since Reckitt
frst invested in this idea.
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Reckitt: A Multinational Corporation Focused on Health, Hygiene, and Home
Founded in 1823, Reckitt was one of the world’s leading consumer health and hygiene frms. The
company stated its role in social impact: “Our business is built on the belief that we have a role to improve
the access to hygiene, health and nutrition of millions of people each and every day; we call it our fght
for access. We have unique skills to bring to the challenges faced by the world today: commercial acumen;
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behavior change insights; and innovation expertise. We bring these skills to life by partnering with global
experts, aligned with our focus areas.”2
Reckitt operated in over 60 countries, with headquarters in the United Kingdom, Singapore, Dubai, and
Amsterdam. The company employed approximately 40,000 people worldwide and its products reached nearly
200 countries. It was one of the top 20 companies listed on the London Stock Exchange. Its global brands
included Dettol, Harpic, Dr. Scholl, Lysol, Mucinex, Clearasil, Air Wick, French’s, Nurofen, Strepsils, Woolite,
Vanish, and Calgon. The company described its culture as focused on hard work, innovation, and impact,
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and believed this culture attracted motivated, forward-thinking employees.
Reckitt operated an innovation offce in the U.K., where Ashraf had worked for over three years. There,
he and others on the team had license to consider trends that could affect the future of Reckitt. At that
time, Ashraf and some of his colleagues explored how the world’s income-poor, often collectively referred
to as the base of the pyramid (BoP), might shape product, manufacturing, and distribution requirements at
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Reckitt and beyond. Since then, Ashraf had a strong sense that Reckitt needed to learn how to better serve
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that huge and growing market. His return to Pakistan proved fortuitous for that goal.
Reckitt Pakistan
Reckitt Pakistan, where Ashraf also acted as general manager for the health business unit, was one of
the main locations where the company invested in social impact programs to improve health and hygiene
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among the BoP. Reckitt started working in Pakistan in the 1950s, originally under the name of Reckitt &
Coleman of Pakistan Ltd. In 2000 it became RB Pakistan before rebranding to Reckitt Pakistan. The Pakistan
offce employed over 500 people and was headquartered in Karachi, with regional offces across the country.
It produced and sold health and hygiene brands, focusing primarily on urban centers.
Rural Pakistan: Business Opportunities and Social Needs
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Twice the size of California, Pakistan bordered Afghanistan, China, Iran and India. The country achieved
independence in 1947 when its territory, containing Muslim-majority areas of the former British Indian
Empire, was portioned off from India. Islam, practiced by 96% of the population, was the state religion and
substantially infuenced the social, economic, and political climate. The population of the country, ffth
highest in the world, was over 200 million and predicted to exceed 300 million by 2050.
Tensions with Hindu-majority India, however, led to two wars and the secession of East Pakistan to
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become the country of Bangladesh. The border between Pakistan and India remained a point of confict
between the two nations. In western Pakistan, in the regions next to Afghanistan, tribal leaders had
signifcant infuence and security remained fragile. Although China became an important economic partner,
decades of political disputes and low levels of foreign investment impacted development.3
A relative lack of mobility and ways for women to engage in economic activity were defning features of
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the business and social landscape. Specifcally, in rural Pakistan women often remained at home, offcially
jobless. Traditionally, this practice was meant to restrict contact with men, thus providing protection and
respectability. As a result, rural women rarely shopped or traveled outside their communities, and only when
accompanied by their husbands or other male family members. Men did most of the household shopping
alone. While in recent years Pakistani women held major political offces, including prime minister, cultural
change for women was less pronounced outside major cities.
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Over twenty million rural households made up 62% of the total households in the country.4 In rural areas,
lack of access to quality healthcare services and products meant poor health and hygiene were prevalent. A
World Bank study reported that fnancial consequences of such conditions represented approximately 343.7
billion Pakistan rupees (PKR),ii equating to a loss of nearly 4% of national GDP.5 Poor health and hygiene
also posed a direct threat to people’s lives. According to a Pakistan Demographic and Health Survey, 22.5%
of mothers reported that their children had suffered from diarrhea in the past two weeks, and almost 53,000
Pakistani children died of diarrhea each year.6
Governmentally, the country was divided into four provinces, two autonomous territories and one
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federal territory (the capital). Each province and territory was subdivided into divisions, then districts, then
talukas, which were further subdivided into union councils. Leaders of each union council made decisions
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The exchange rates in April 2019 were approximately 1 USD = 142 Pakistani rupees and 1 Euro = 160 Pakistani rupees.
for their local community, which included encouraging or discouraging the introduction of new products or
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businesses.
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Punjab, the most populated Pakistani province, held about 10 million rural households and most of
these were either not reached or were underserved by standard FMCG distribution channels. Therefore,
many of these households instead used inferior or counterfeit products, which often contained ingredients
detrimental to health, especially for children. These consumers had limited choice and paid a relatively
high cost.
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Within this context emerged the idea of SSS.
Building a BoP Strategy
The journey to SSS began in Reckitt’s global headquarters in the U.K. through the leadership of Patricia
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(Patty) O’Hayer, global head of external affairs and strategic partnerships. In 2013, O’Hayer was searching
for a global social issue that could rally the creative and purpose-driven energy of Reckitt employees. The
global impact of diarrhea-related illnesses was undeniable. Diarrhea was the second most common cause
of death among children under fve and was responsible for 1.5 million deaths each year—more than AIDS,
malaria, and measles combined.7 A role for Reckitt was clear. Handwashing and good hygiene can mitigate
the spread of diarrheal disease, and Reckitt’s strong portfolio of soaps and cleaners meant the issue was
strategic on several fronts.
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At this stage, the effort primarily focused on enhancing Reckitt’s corporate social mission. O’Hayer
sought to make this a company-wide effort by seeking funding from Reckitt employees and business units,
as well as the company’s budget. Leveraging Reckitt’s long-standing partnership with the international
non-governmental organization (NGO) Save the Children (STC), O’Hayer said she wanted to “invest in a
bespoke program aimed at saving lives of children across three countries.” Referred to as “Save a Child Every
Minute,” the new program focused on educational outreach and behavior change and targeted Pakistan,
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India, and Nigeria.iii
In Pakistan, Reckitt’s investment in “Save a Child Every Minute” involved supporting the seven-point
diarrhea prevention approach developed by the World Health Organization and UNICEF.8 Working with STC to
roll out this program nationally allowed Reckitt to explore a key thesis related to how development agencies
teach handwashing. Essentially, most programs teach the benefts of and encourage handwashing with
illustrations featuring unbranded soap. O’Hayer believed that associating handwashing and other hygiene
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practices with aspirational brands could advance both health and sales goals.
O’Hayer helped catalyze efforts to develop products specifcally tailored for low-income markets. This
included a product development hackathon in Kenya in late 2013. The 50 participants (including suppliers,
key employees, and development and health specialists) spent one week in rapid prototyping and fact-
fnding about habits, technology, and behaviors around diarrheal deaths.
A prototype low-cost soap bar (Ashraf played a leading role in its development) showed particular
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promise. Primarily based on research from Pakistan, Reckitt learned that women were not using soap, but
were using sand or other products because extant soaps (including the Reckitt brand) dried their hands. In
addition, many women lacked knowledge of why and how they should use soap, decent-quality soap was
expensive, and the more available counterfeit soaps did not achieve much in terms of hygiene and disease
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This program also went under the name “Stop Diarrhoea” and “Save a Child a Minute.”
protection. Furthermore, research suggested that Reckitt’s soap, Dettol, “didn’t smell good.” The message
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was that the soap needed fragrance and moisturizers to interest women. When employed, soap was typically
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used once or twice a week for bathing, and the lifesaving goal was to move usage to fve-plus times a day
(before and after meals and after going to the bathroom). Based on this goal and consumer insights, the
company created a new formulation called Hope soap. The new product was well received in trials across
India and Pakistan.
Pilot Successes and Challenges in Rural Pakistan
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In 2014-15, in conjunction with the “Save a Child Every Minute” behavior change program, Reckitt’s
global team funded a pilot program focused on women as entrepreneurs and educators in rural Pakistan.
Developed in collaboration with Ashraf and colleagues at Reckitt Pakistan, as well as STC initially, Project
HOPE had two objectives: (1) education about the causes of diarrhea and behavior change required to
improve health and hygiene practices and, (2) provision of affordable, top-quality branded products to
complement the behavior change. The rural women, who were titled “hygienists” in recognition of their role
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in health education, had three tasks: sell a basket of branded goods, educate and reinforce this education
continuously, and survey households. All tasks were income-earning activities (see Figure 1).
Figure 1
Hygienists in Action
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Source: Reckitt Pakistan.
Putting women front and center of an education and commission-based consultative selling effort
was seen as a way to both improve livelihoods and promote empowerment. To provide a steady stream
of income, the women were paid to conduct the household-level survey and education activities. To help
ensure that the women earned a suffcient return on their investment of time and money as sales agents,
O’Hayer, Ashraf, and their colleagues in the feld recognized that the business model could not survive with
only Reckitt products.iv Emphasizing goods deemed socially benefcial, Reckitt provided Hope soap, Dettol
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antiseptic liquid, Harpic toilet cleaner, Veet hair removal cream, and Mortein mosquito coils, while also
inviting EBM (nutritional biscuits), Santex (sanitary napkins), and Shan Foods (spices, recipe mixes and
salt) to participate. These product categories were either newly available to rural markets or expected to
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The Reckitt team’s decision was also infuenced by reviewing CARE’s experience with JITA in Bangladesh. For more information visit:
https://jitabangladesh.com/.
outperform counterfeit or locally-produced products. An assumption was that rural consumers would value
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the higher quality and consistency associated with using such branded products.
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In June 2015, STC lost its license to operate in Pakistan, so Reckitt engaged with another international
NGO, Plan International, to continue the Stop Diarrhea program, as well as to support the launch of Project
HOPE. HOPE’s small-scale pilot went ahead in Dhori, a village in Punjab province about 200 kilometers from
Islamabad. It ran from November 2015 to May 2016. The on-the-ground activities were managed by NEXUS,
an experienced marketing company, which reported to Nameer Jamillee, a contractor hired by Reckitt
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Pakistan for that purpose. The Reckitt corporate team paid the marketing company to conduct the behavior
change activities, while Plan International acted as advisors to the pilot and provided educational material
and expertise.
In the six-month pilot, the overall goal was to see if this model—based on local women as sales
agents—could be sustainable in rural Pakistan. Results showed promise on several metrics, including
sales, reduced disease, increased self-reported hand washing, and validated reductions in open defecation.
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Reckitt was particularly pleased to see that its newly designed soap was the next-to-best-selling product,
after biscuits (cookies). The oral rehydration solution (ORS), however, sold poorly, as versions were often
available free at local health centers. Pilot organizers concluded they had enough data to support the idea
that women armed with information and the right supplies were active change agents in their communities
and interested in selling goods, while also teaching and sharing information.
An important aspect was that the women were welcomed in most homes. Habit change seemed to
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come from this direct access into households; the ability to talk side-by-side about health and nutrition
was instrumental in facilitating behavior change. Additionally, bringing products into the household offered
a new dynamic in the culture where, generally, the husband went out to do the household shopping. Now
women could discuss and buy products directly from other women. The pilot also found that, in certain
locations, hygienists felt more comfortable wearing veils or being accompanied by other women or children
as they traveled to households in their community.
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This frst pilot also demonstrated the challenges of achieving economic sustainability for the company.
Managing demand creation—through behavior change and establishing a reliable supply of goods through
the women entrepreneurs—was expensive. The model required NEXUS, as well as the Reckitt team, to be
highly engaged in facilitating the efforts of a relatively small number of entrepreneurs. Paying the women
to be educators was also relatively costly. Overall, the limitations of philanthropic-based strategies were
apparent. Any efforts at further scale necessitated additional sources of funding.
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Transitions in Strategy
With her focus on moving pilot programs away from being corporate-led, O’Hayer began the search
for a different type of partner. Her search led to the Business Innovation Facility (BIF), a market systems
development program based in the U.K.9 BIF was funded by the U.K.’s Department for International
Development and implemented by the international development arm of the global consulting frm PwC.
In 2015, BIF launched a new funding stream targeting private sector multinational companies developing
innovative approaches aimed at improving the lives of the BoP. After extensive discussions, BIF gave Reckitt
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fnancial and advisory support to extend and enhance its work in providing health and hygiene products in
low-income markets in rural Pakistan.
The BIF support for a larger-scale pilot came with several important requirements. First, any BIF-
supported initiative needed to be “owned” by a business unit within a company as part of the company’s
market development strategy. Second, efforts must move from being a pilot to becoming an economically
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sustainable enterprise. As Tom Harrison, technical director for BIF, explained, “The goal is to avoid
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subsidizing in a way that the only learning is that a subsidized model works.” Third, BIF funding could
not be used to cover staff time within a large multinational company, meaning that Reckitt had to cover
such costs. By this time, Ashraf and O’Hayer had decided that Project HOPE would be better located within
Reckitt Pakistan. Thus, Reckitt formally transitioned ownership of the initiative from a social program to a
proft-making business led by Reckitt Pakistan.
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BIF support began in May 2016 with a workshop to help Reckitt think through next steps.v The BIF
team, primarily Tom Harrison with support from BIF-Pakistan, conducted a comprehensive market and
strategy assessment for rural hygiene products in Pakistan, which was positive. Involvement of the local BIF
team, particularly Iftikhar Mohgal and Nabeel Raza, proved instrumental. Working together with Reckitt’s
Ashraf and Jamillee, this team provided the co-leadership needed to energize and guide renewed efforts.
The outcome was a growing sense of excitement that rural distribution could indeed be a viable business
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opportunity for Reckitt Pakistan, and one that didn’t require continued support from a social or corporate
social responsibility (CSR) fund. A revised pilot was developed. Plan International used its network to
facilitate behavior change activities instead of assigning that role to a private company. Such awareness
efforts were combined with the ongoing and separately funded Save a Child Every Minute outreach program
to maximize impact and cost-effectiveness.
Based on interest and ability to be involved in this second pilot, a new set of product partners
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emerged and Shan Foods, EBM, and others dropped out (although Shan and EBM would later rejoin). The
new partners, including Shield and National Foods, contributed oral and baby care and food products,
respectively, to the basket of goods (see Figure 2). All companies supplied products at cost and agreed to
participate in this Reckitt-led initiative for two reasons; one related to the publicity benefts and the other
related to the opportunity to gain more market knowledge about rural Pakistan.
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Figure 2
Product Categories and Items Included in Phase II
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Source: Saaf Sehatmand Services.
Reckitt engaged a large local distribution company, Premier, to ensure that products from all of the
companies involved would be delivered effciently and effectively to the growing network of local women
entrepreneurs. Premier, established in 1971 and the largest locally-owned distribution company, already
distributed products for some, but not all, of the product partners. In this second pilot, all products were
delivered directly to Premier who then transported them to its warehouse closest to the feld activities, after
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which it arranged for private delivery to the homes of the hygienists.
In addition to expanding the product basket, Ashraf and his colleagues recognized the importance of
rethinking how to achieve scale across Punjab province and rural Pakistan in general. The innovation was
v
This workshop was led by Erik Simanis, founding partner of TIL Ventures.
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to create a new outreach model that involved a dual-level structure of rural entrepreneurs (see model in
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Figure 3). This hub-and-spoke approach to village-level entrepreneurship led to the creation of a system of
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Bari Aapas and Sehat Aapas (Aapa means “respected older sister” in Urdu and Sehat means “health”). The
Bari Aapas were women recruited and trained by Reckitt and its partners. The Bari Aapas then identifed and
recruited their own teams of fve or six Sehat Aapas, whose role was to be door-to-door sellers in villages.
Sellers received 15-25% of the revenues generated, depending on the products. Sehat Aapas then paid their
Bari Aapas approximately 30% of their revenue.
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Figure 3
Business Model for Project HOPE Phase II
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In order to become a Bari Aapa, a woman needed to attend training and invest in the start-up costs
associated with her product inventory. This working capital was provided interest-free to the Aapas, who
then repaid this loan in nominal installments over three to four years.vi When they made sales, Aapas asked
for payment in cash, but could decide individually to grant credit. Bari Aapas earned around PKR 4,000 per
month and Sehat Aapas about half that amount. Aapas generally worked two-three hours per day for fve
or six days each week. In comparison, a local schoolteacher earned approximately PKR 1,500-2,000 per
month and worked signifcantly more hours. See Figure 4 for information on the motivations and benefts
of becoming an Aapa, as well as information on rural women as customers.
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Interest free capital was provided to ensure that the Aapas were not initially burdened with high fnancing costs, which in some
cases reached 25-30% from microfnance banks. This aligned with Sharia law, which prohibits usury, or interest paid on loans.
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Figure 4
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Aapas and Customers
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• The Aapa job had more fexibility than other available jobs (such as schoolteacher). It could be
attractive to women seeking greater mobility and/or social interaction.
• Becoming an Aapa was a new opportunity for women in rural communities and among the few
jobs available to women.
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• The Aapa role allowed particular fexibility for widows, single mothers, women caring for aged
parents, and others whose commitments otherwise limited their employment availability.
• It was socially acceptable, as an Aapa, to learn from other local women about personal hygiene
and household-related topics.
• Some women preferred the position of Bari Aapa and the income and management experience
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that it provided.
• Aapas became a consistent and local source of reliable goods and advice.
• Some women needed education and reinforcement regarding the habit changes associated with
some products. Aapas could enter homes freely and provide advice and ask questions, or reinforce
messages during repeat visits. They were change agents and part of an education effort, depending
on the product.
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• Women could purchase sanitary napkins without being embarrassed.
• Aapas educated women and girls about sanitary napkins and reproductive health. Traditionally,
many girls missed or dropped out of school due to social norms about menstruation.
Source: Interviews and feld visits by Reckitt Pakistan and the case authors.
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BIF provided a grant of £32,000, as matched funding, with in-kind products and labor paid for by
Reckitt. Half of the money was for working capital for the women distributors and half was for operating
costs such as salaries of feld staff—with any remaining shortfall covered by Reckitt. Field level oversight
was provided by Jamillee, who had been hired full time by Reckitt Pakistan to manage corporate affairs and
social impact programs. Reckitt decided to hire a dedicated local feld staff to supervise Aapas and enable
sales, which proved successful.
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The model was a pilot in 27 villages of the Sargodha and Narowal districts, reaching 19,000 households
through 9 Bari Aapas and 27 Sehat Aapas. A third-party survey found that Bari Aapas averaged PKR 4,000
in monthly commissions. Additionally, 100% of Bari Aapas and 77% of Sehat Aapas said they used their
earnings to buy food for their families, and 43% of Bari Aapas and 41% of Sehat Aapas said their income
also paid for children’s education.10
The pilot demonstrated the value of providing 1) products that were not available locally and 2)
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improved versions of locally available products. In particular, there was a high demand for branded products.
Even in these relatively remote areas, brands and the assurance of quality seemingly had value. For example,
interviews with local women confrmed that some purported generic spices were mixed with ground-up
bricks. Women said that branded products provided protection from this type of fraud. Furthermore, Reckitt
had begun to fnd that demand was greater for its branded Dettol soap than it was for Hope soap, which
had been designed for the BoP. Local consumers knew of the brand and wanted the same product as was
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available in the wealthier urban areas.
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Not unexpectedly, and as in the frst pilot, demand for particular products varied. In addition, some
demand, such as that for mosquito coils, was seasonal. Ashraf and his team knew this information would
enable them to optimize what the Aapas carried in their basket of goods. Yet, even with these learnings and
successes, one important challenge remained unsolved: how to scale.
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SSS: A Jointly-Owned Service Company
The promise of scale—and the roadblocks within Reckitt associated with scale—became the prime
driver for developing SSS. At its current size and cost, Project HOPE did not have a measurable impact on
Reckitt’s fnancial performance or metrics. Ashraf recognized, however, that were this initiative to move
forward as an internally managed and funded Reckitt project, its eventual scale would challenge existing
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norms and established metrics. First, funding this growth would require an investment that would pay off
after only four to fve years. Second, a willingness to adopt such a low-margin, high-investment business
model (and the necessity of working with competitors) might last only as long as Ashraf remained CEO
and general manager of the health business unit at Reckitt Pakistan. Managers at Reckitt were rewarded
on margin and short-term results and taught not to trust competitors. Different management might view
the low-margin contribution, together with the collaborative business model, as an ineffcient and risky
endeavor that negatively impacted their incentive structure.
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Additionally, scale would require a new approach to engaging the other product partners. These
companies had been willing to provide relatively small volumes of their products at cost, in return for the
benefts of learning and generating positive public relations. Such advantages, however, were not likely
to increase substantially if the program scaled. To stay engaged, the partners, as well as Reckitt, needed
proftable returns from their investments. Similarly, scale required fnding a more cost-effcient approach to
facilitating behavior change and usage. Meanwhile, Plan International had its license to operate revoked
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and was asked to leave Pakistan, so it could no longer support behavior change activities. Furthermore, the
Save a Child Every Minute program, which had supported behavior change efforts in concert with the Project
HOPE pilots, was winding down.
Therefore, SSS was conceived as a way to address Reckitt’s internal issues as well as create an
economically viable platform for scale that would encourage the product partners to stay engaged in a
meaningful way. As a service company, SSS had objectives including (1) analyze, map, and meet demand
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for hygiene products in rural areas to improve health and hygiene conditions; (2) extend FMCG supply
chains to rural areas by training and deploying village-level entrepreneurs; and (3) contribute to women’s
empowerment through sustainable livelihood opportunities. The company would build and maintain all
aspects of the business model, yet never own any of the products as they passed through the supply chain.
New Governance Model

In addition to using a shared platform for product distribution, SSS embraced a shared governance
model. While diffcult after so much of its own investment, Reckitt Pakistan made the decision to not
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seek control and instead advocated a shared ownership model. Companies wishing to continue offering
products in the basket were required to make equity investments. In return, each partner was allotted
a specifc set of non-competing product lines they could include in the Aapa basket (see Exhibit 1 for
the products provided by each company). This allocation of product lines ensured inclusivity, as well as
avoided competitive product conficts, and it applied to any subsequently-joining partners. Overall, the SSS
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governance model provided stability in product offerings and a mechanism to distribute products without
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any company launching such an effort alone. As Ashraf explained, “with the creation of an outside entity
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like SSS, a manager can get the costs of the project out of the P&L while keeping the revenue without the
loss to margin metrics.”
After these changes, one company, National Foods, left the partnership while two others, EBM and
Shan Foods, rejoined. (In rejoining, Shan Foods planned to launch a BoP-specifc product in smaller packets
and under a new brand, Maa.) Of the eight seats on the board of directors, Reckitt could appoint two
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directors while Santex, Shield, Shan, and EMB could appoint one. The remaining two seats were held by the
Rural Support Programmes Network (RSPN), a not-for-proft organization that espoused rural development
through social mobilization.11
At the suggestion of the BIF team, Ashraf approached the leadership of RSPN, a move that recognized
the necessity of SSS gaining access to and establishing deep roots with local communities in rural Pakistan.
With a board presence, RSPN could bring such access and knowledge and could ensure that SSS maintained
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an appropriate balance between fnancial performance and social impact. For RSPN, participation provided
a unique opportunity to explore a new approach to improving health and hygiene in rural communities. To
facilitate RSPN’s involvement as a co-owner of SSS, BIF provided a grant to cover their equity investment.
With over one-third of the equity, RSPN was the largest shareholder of SSS. The ownership model is presented
in Figure 5.
Figure 5
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SSS Ownership Structure
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Because no one partner held a majority ownership, by law the partners did not have to consolidate
SSS results into their fnancial reports. Furthermore, this ownership model offered certain protections to
all partners. A unanimous decision was required to change business projections, development milestones,
organizational structure, share transfer, or any fnancing agreements with third parties. A majority vote
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was required in most other board-level decisions. Another expectation in the governance structure was
that the fve product partners would take turns supplying a “volunteer” CEO for 12 months. After fve years,
this expectation would be re-evaluated based on the potential for SSS to be self-suffcient. Calculations
suggested that SSS would break even in year fve.
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Each product partner agreed that items in the basket would not cost rural consumers one penny more
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(or less) than current urban market prices. Partners adhered to this policy by reducing the length of the
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supply chain, thus diminishing the associated margins required by intermediaries. If this adjustment did not
result in partners earning the same margins they gained from sales in other markets, partners would adjust
internal margins for at least the frst phase of the launch.
The product partners expected that distribution through SSS would have a material impact on their
company’s bottom line after fve to seven years. When asked why they were investing in SSS, partners
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had a common answer: They valued learning about rural markets and the process of market creation
through behavior change. Specifcally, they wanted to know more about what consumers wanted, how much
purchasing power they had, how they wanted these products packaged, etc. For RSPN there was a value
proposition that centered on women and families learning skills and obtaining quality products (versus
the counterfeits and expired products that created danger in these markets), fair pricing, better and more
consistent supply, enhanced income-generating opportunities, and greater empowerment.
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All the partners wanted to know about the effectiveness of door-to-door sales and any potential
social benefts or backlash from this approach. Some behavior change topics were socially sensitive, such
as women traveling home-to-home and the discussions about sanitary napkins. Thus, partners valued SSS
for business and social impact reasons. At one board meeting, the members agreed that if SSS grew and
succeeded, they would all have the satisfaction of knowing they were founding members of an innovative
approach to BoP business. Beyond the promise of increased sales and social impact, SSS offered founding
members an opportunity to see cross-sector innovation in action.
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New Business Model
In sum, the partners had created a new for-proft company with an innovative governance structure, a
potential for social impact, and a distinct capability to distribute health, hygiene, and nutritional products
in rural Pakistan. The SSS business model (see Figure 6) leveraged the lessons learned from the Project
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HOPE pilots and had four main components focusing on 1) behavior change and demand generation, 2)
product distribution, 3) working capital/loans for the women, and 4) supply of products from the partners.
For SSS to successfully grow, these four components had to scale simultaneously and in concert.
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Figure 6
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SSS Business Model
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Source: Created by the case authors.
Demand Generation and Aapa Recruitment: The Role of RSPN

In order to scale, this business model required a different kind of on-the-ground partner, one with
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extensive connections and established networks in rural Pakistan. RSPN offered access to the largest
outreach network in rural Pakistan and, as an owner and board member, could play a critical role in the
growth of SSS. In particular, RSPN was central to the work of supporting and scaling behavior change
and entrepreneur development and helping to bridge potential conficts between maximizing social and
economic performance. Incorporated in 2001, RSPN consisted of eleven member Rural Support Programmes
(RSPs), and had connections to over 43 million rural Pakistanis through these RSPs (see RSPN organizational
design in Exhibit 2). This reach included access to 7.2 million households organized through Local Support
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Organizations (LSOs). RSPN leveraged the LSOs’ existing social networks to identify union councils within
districts to connect to communities that could provide insights into socioeconomic status at the village
level, and offer essential links for buy-in at the neighborhood and household levels. In that way, RSPN could
help identify women who could assume the roles of Bari Aapas and Sehat Aapas and facilitate behavior
change. RSPN could also help SSS identify where demand was already high as a result of health awareness
programs that RSPN or other non-profts or government agencies had launched. These kinds of connections
could ensure that the Aapa network and market development work scaled in synch, as they essentially
represented the local supply and demand factors.
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Distribution Leadership and Support: Role of Premier Industries

For the frst fve years, SSS would contract with Premier Industries, the company that performed the
distribution function in the recent pilot. Premier participated as a for-proft stakeholder, seeing this as
“business as usual”—meaning it was not offering a price reduction or engaging in a CSR effort. While
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Premier was not an equity partner, it was owned by the same holding company as Shield, which supplied
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the oral hygiene products in the basket. Thus, the company had a close but indirect tie to SSS’s board of
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directors. Premier’s role was to ensure effective collection and timely distribution of products. It bought and
took possession of the products for the basket at its urban warehouses and collected payment upon delivery
to the Aapas in the rural communities.
Premier purchased at a wholesale price and recouped its cost plus margin upon delivery to the Aapas.
Premier paid a 4% service fee, based on manufacturer’s suggested retail price (MSRP), to SSS. This service
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fee was then reimbursed to Premier by the product partners. Across the supply chain, the product partners
were responsible for paying the 16% sales tax upon delivery to Premier.vii Premier expected to generate a
margin of 5-6% of trade price to cover distribution plus proft, while the Bari Aapa had a 20-25% proft
margin. To ensure transparency for the fnal customer, all product packaging was expected to include the
MSRP (ensuring a consistent retail price across rural and urban markets). Using a product with an MSRP of
25 PKR as an example, the product partners would sell it to Premier at 20 PKR and Premier would sell it to
the Bari Aapa at 21 PKR. The Bari Aapa would sell it to her Sehat Aapas at 22-23 PKR. The Aapas then sell
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the product to customers at 25 PKR. Premier would also pay about 1 PKR to SSS to cover the service fee,
which was then invoiced back to the product partners.
Working Capital and Interest-Free Loans for the Women

The third component of the business model related to funding the working capital needs of the growing
network of Aapas. Akhuwat, the world’s largest interest-free microfnance program, agreed to serve as
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custodian of the revolving fund created to fulfll the working capital needs of Aapas, and BIF provided a
grant to establish this fund. Akhuwat, a non-proft organization, had more than 700 branches across Pakistan
providing interest-free loans so that poverty-stricken Pakistanis could start businesses and become self-
reliant.12 Funds to the Aapas would be disbursed and recovered through Akhuwat, with SSS staff facilitating
as needed. Using these working capital loans, the Aapas would pay for the initial basket and their reorders
upon delivery. Other fnancing solutions were also explored within areas where Akhuwat might not have
direct presence, including using existing endowment or community funds at the LSO level or potentially
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engaging telecommunication companies to provide credit in mobile wallets.
Product Supply and General Management

The role of SSS in this business model was complex. Much like a conductor of a symphony, SSS had to
ensure all the pieces (the entrepreneur network, the behavior change activities, the product distribution,
and the working capital fnancing) were in harmony. If one component did not deliver as expected, all
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others would suffer. SSS supported the Aapas training and retention and the planning of local behavior
change activities through its network of territory managers and offcers. The SSS team also had to ensure
smooth relationships among the product partners, the distributor, and the Aapas in terms of order booking,
supply availability, and assistance in product planning and coordination, with the goal of an uninterrupted
supply of products to the women entrepreneurs based on local demand and the Aapas’ available working
capital. SSS would also interface in the disbursement and collection of loans through the fnancing partners.
As Janjua, SSS’s frst pro-bono CEO, explained: “We are a service organization that connects women. SSS
facilitates women getting products and trainings and logistics support and general business guidance. SSS
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The accounting for the sales tax on the service fee was important for SSS and the product partners. Consider a product with a value
of 100 PKR. The service fee would be 4 PKR, the sales tax (@16%) would be 0.64 PKR, so the invoice to Premier would be 4.64
PKR. Specifcally, it meant SSS would get the full amount of a 4% margin. If this were inclusive of sales tax, the net margin would
have been lower by the sales tax amount included in the invoice. On the product partner/distributor side, they pay more, but the
additional sales tax could be adjusted against their output tax. Therefore, net impact would be zero but it would affect their cash
fows until the time adjustment occurred.
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is the glue, the partner to the women, the facilitator. We set training, service levels, standards, logistics,
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support, etc.”
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Other SSS roles included collecting and reporting data related to key indicators of performance. These
data assisted in facilitating day-to-day activities, as well as tracking overall business and social outcomes.
SSS was also tasked with identifying new markets, providing market intelligence on counterfeit products,
supporting the development of SSS-branded material and activities (including sales kits, product brochures,
and marketing events in schools and health clinics) and handling ancillary outreach and logistical activities
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as needed.
In terms of staff, SSS was led by the volunteer CEO, a position that would revolve among the product
partners, with Janjua serving as the frst. A newly hired business manager would run the company day-to-
day, supervising a team of territory managers who would oversee territory offcers. Each territory offcer
would manage a cluster of Aapas serving between 6,000-7,000 households. The company also employed
an outreach manager, recruited from RSPN. She was paid initially through the BIF grant and then expected
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to transition to SSS within two years. She would oversee the SSS relationship with RSPN, ensuring timely
and effective behavior change activities and a continuing positive experience for the Aapas and their
communities. SSS would also have a fnance manager.
To support these activities, SSS received the 4% service fee, paid monthly by Premier, based on the
MSRP of the total sales generated by each product partner. This was SSS’s ongoing revenue source, and
long-term survival required suffcient scale to cover fxed and variable costs. SSS planned to reach more
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than one million households in 10 districts of rural Punjab over the next fve years by deploying around 800
Bari Aapas and 4,800 Sehat Aapas. To achieve this, SSS would work in four districts (two existing and two
new) in the frst year of operation. The scope would be scaled up to six districts in the second year and ten
districts of Punjab during the subsequent years. The year-one goal was to reach 102,000 households and
in the ffth year to sell products to 720,000 households, out of 1.2 million reached. Based on the fve-year
fnancial model (see Exhibit 3) to establish and sustain the entity, an initial equity investment of Rs.40
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million was required and collected from the equity partners. As Ashraf noted, the design of SSS brought
together organizations that could “bring sustainability, business acumen, an existing distribution network,
and commercial oversight to the business.” In building this shared platform, they also shared costs, risks,
and learning.
Profts were to be used for expansion and outreach to households beyond 1.2 million. SSS itself did
not envision generating substantial fnancial returns for its investors; instead, the partners saw fnancial
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and social returns through increased sales of health, hygiene, and nutritional products through the growing
Aapa network. However, if SSS profts became available, money could be distributed to the shareholders.
While the fnancial models were encouraging, Ashraf and Janjua knew there were considerable challenges
still to be addressed if the vision for SSS was to become a lasting reality—which is why they stayed in the
boardroom that day to talk further about how to navigate the road ahead and how to make sure they built
not just another successful pilot, but rather an organization that could scale.
The Journey Ahead

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As they wrapped up a review of the journey to SSS, Ashraf and Janjua were reminded of the central
logic behind the formation of this new company: the opportunity to provide a million households with
access to branded health and hygiene products in the next fve years. Working together allowed the product
partners to achieve something that none could do alone. By building a shared platform that operated
15
outside the participating partners, SSS avoided the organizational constraints that had made it so diffcult
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to internally develop a scalable business model focused on the BoP. Including RSPN as an equity investor
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enabled unparalleled access to rural communities. Yet, this approach also resulted in a new set of issues
that required careful attention. Ashraf and Janjua wanted to ensure that combining an innovative business
model with a novel joint-ownership approach would avoid challenges that had befallen other initiatives
seeking to proftably serve the BoP at scale.
Indeed, Ashraf, Janjua and the rest of the SSS board felt they were on the cusp of something
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extraordinary. Yet they had no template to guide them. Different components of the business model had to
scale together in a seamless fashion, and the board had to set aside potential competitive and ideological
differences to ensure SSS created suffcient value across a disparate set of shareholders and partners. Janjua
and Ashraf knew that if the foundation for the company was poorly developed, SSS could crumble under the
weight of these diverse expectations. Each taking a drink of tea, they began to prioritize and address issues
requiring immediate attention.
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About This Case Study:
This document is an output from a project funded by U.K. Aid from the United Kingdom government.
However, the views expressed and information contained in it are not necessarily those of or endorsed by
the UK government who can accept no responsibility for such views or information or for any reliance placed
on them. This case study has been prepared for general guidance and discussion on matters of interest
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and does not constitute professional advice. Outside of an academic setting, information contained in
this case should not be acted upon without obtaining specifc professional advice. No representation or
warranty (express or implied) is given as to the accuracy or completeness of the information contained
herein and, to the extent permitted by law, no organization or person involved in producing this document
accepts or assumes any liability, responsibility, or duty of care for any consequences of anyone acting,
or refraining to act, in reliance on the information contained in this case study or for any decision based
on it.
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Exhibits
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Exhibit 1
Product Partner Summary
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Exhibits (cont.)
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Exhibit 2
RSPN Organizational Design
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Source: Rural Support Programmes Network.
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Exhibits (cont.)
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Exhibit 3
SSS Financial Projections at Founding
(shown in Pakistani Rupees)
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Endnotes
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“RB and Save the Children Launch Ground-Breaking Partnership to Reduce Child Deaths from Diarrhoea.” Reckitt, 25 Mar.
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1
2015. https://www.reckitt.com/newsroom/latest-news/news/2015/march/rb-and-save-the-children-launch-ground-breaking-
partnership-to-reduce-child-deaths-from-diarrhoea/. Accessed 23 Sept. 2022.
2 “Social Impact is Key to Our Sustainability Ambitions.” Reckitt. https://www.reckitt.com/sustainability/fairer-society/social-
impact-investment/. Accessed 3 Oct. 2022.
3 “Pakistan.” CIA Factbook. https://www.cia.gov/the-world-factbook/countries/pakistan/. Accessed 3 Oct. 2022.
“Pakistan Economic Survey 2017-18: Population, Labour Force and Employment.” Pakistan Bureau of Statistics. https://www.
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4
fnance.gov.pk/survey/chapters_18/12-Population.pdf. Accessed 3 Oct. 2022.

5 “Inadequate Sanitation Costs Pakistan up to 3.9% of GDP.” The World Bank, 12 Apr. 2012. https://www.worldbank.org/en/news/
press-release/2012/04/12/inadequate-sanitation-costs-pakistan-up-to-39-of-gdp. Accessed 21 Oct. 2022.
6 National Institute of Population Studies (NIPS) [Pakistan] and ICF International. 2013. Pakistan Demographic and Health Survey
2012-13. Islamabad, Pakistan, and Calverton, Maryland, USA: NIPS and ICF International.
7 “Diarrhoea.” UNICEF, July 2022. https://data.unicef.org/topic/child-health/diarrhoeal-disease/. Accessed 21 Sept. 2022.
8 “Diarrhoea: Why Children Are Still Dying and What Can Be Done.” UNICEF. https://7pointplan.org/diarrhoea-control.html.
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Accessed 21 Sept. 2022.
9 “About Us.” Business Innovation Facility. https://businessinnovationfacility.org/about-us/. Accessed 21 Sept. 2022.
10 Ipsos Public Affairs. “Post-intervention Coverage Survey of Project HOPE in Narowal and Sargodha Districts, Punjab Province.”
Report submitted Feb. 2018 to Business Innovation Facility.
11 “The Rural Support Programmes Network (RSPN).” RSPN. http://www.rspn.org/. Accessed 21 Sept. 2022.
12 “About Us.” Akhuwat. http://www.akhuwat.org.pk/. Accessed 21 Sept. 2022.
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Notes
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Established at the University of Michigan in 1992, the William Davidson Institute
(WDI) is an independent, non-profit research and educational organization focused on
providing private-sector solutions in emerging markets. Through a unique structure
that integrates research, field-based collaborations, education/training, publishing,
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and University of Michigan student opportunities, WDI creates long-term value for
academic institutions, partner organizations, and donor agencies active in emerging
markets. WDI also provides a forum for academics, policy makers, business leaders, and
development experts to enhance their understanding of these economies. WDI is one
of the few institutions of higher learning in the United States that is fully dedicated to
understanding, testing, and implementing actionable, private-sector business models
addressing the challenges and opportunities in emerging markets.
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From Pilot To Platform in Rural Pakistan - Case For First Class

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From Pilot to Platform in Rural Pakistan:

Reckitt: A Multinational Corporation Focused on Health, Hygiene, and Home

and believed this culture attracted motivated, forward-thinking employees.

Rural Pakistan: Business Opportunities and Social Needs

Building a BoP Strategy

India, and Nigeria.iii

Pilot Successes and Challenges in Rural Pakistan

Source: Reckitt Pakistan.

Source: Saaf Sehatmand Services.

which it arranged for private delivery to the homes of the hygienists.

Source: Saaf Sehatmand Services.

New Governance Model

Source: Saaf Sehatmand Services.

Demand Generation and Aapa Recruitment: The Role of RSPN

Distribution Leadership and Support: Role of Premier Industries

Working Capital and Interest-Free Loans for the Women

engaging telecommunication companies to provide credit in mobile wallets.

Product Supply and General Management

The Journey Ahead

Source: Saaf Sehatmand Services.

Source: Saaf Sehatmand Services.

fnance.gov.pk/survey/chapters_18/12-Population.pdf. Accessed 3 Oct. 2022.

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