brac-aarong story

The Aarong Story

01.08.2013

Agenda• Concept of Social

Enterprise• How it all began• Challenge• Searching for a solution• Ayesha Abed

Foundation• Growth• Artisans and Aarong• Aarong Today• Roadmap

What is a social enterprise?• A social enterprise is an organization that applies commercial

strategies to maximize improvements in human and environmental well-being, rather than maximizing profits for external shareholders. Social enterprises can be structured as a for-profit or non-profit, and may take the form of a cooperative, mutual organization, a social business, or charity organization. - Ridley-Duff, R. J. and Bull, M. (2011)

• A social enterprise is a business that trades for a social and/or environmental purpose. It will have a clear sense of its ‘social mission’: which means it will know what difference it is trying to make, who it aims to help, and how it plans to do it. It will bring in most or all of its income through selling goods or services. And it will also have clear rules about what it does with its profits, reinvesting these to further the ‘social mission’. – Social Enterprise UK, UK’s National body for social enterprise

COMMERCIAL BUSINESSSOCIAL ENTERPRISES

EXPLOITATIVE BUSINESS

IDEALISTICENTERPRISE

WHERE IS THE RIGHT BALANCE?

SUSTAINABLE

Challenge: How to Find the Right Balance?

Figure: Business Motive Spectrum and Sustainability

BRAC has pioneered a “business model” which defines Corporate Social Responsibility

1. Support development interventions to develop self-employment opportunities of the poor, increase productivity and efficiency of their enterprises activities.

2. Livelihood creation for the poor3. Source of funds for BRAC

Core Purpose of BRAC Social Enterprise

How It All Began

Fathers, husbands, sons were lostDrought and natural calamities Need for social rehabilitation Women without means to earn livingLoss of arts and crafts market

Indigenous crafts in Bangladesh :Nakshi Kantha, Jamdani, handloom (Muslin, Endi, silk, cotton), leather-crafts, date leaf, palm leaf, cane, bamboo, clay, terracotta, doll making, jute, coconut shell and batik, silver and gold jewellery Lack of distribution networks

Bangladesh Liberation - 1971

Resettles and rehabilitates refugees

Organizes and revives cottage industries to enable livelihood opportunities for women

Creation of wide scale retail channels through social enterprises

Crafts ingrained into Bangladeshi households

A True Social Enterprise• Transferring a greater

portion of the work to remote rural areas

• Popularizing boutique-like handicrafts

• Introduction of AZO dye and PCP-free dye in cotton fabric production

• Effluent Treatment Plant (ETP)

• Recyclable packaging

Holistic approach in

tackling poverty

Alleviate Poverty & Empower

rural artisans especially Women

Revival of Crafts &

Traditions

Creating & enhancing

value across the value

chains

Searching for a Solution 1976 - BRAC trains women in sericulture; But waiting for

payment for 2 to 3 months was financially back breaking. 1978 - To provide a market linkages for rural artisans purveying

crafts established Aarong (means “Village fair” in Bangla). Establishes textile design and service workshop to experiment

with materials, weaving, dyeing and sewing technologies.

Ayesha Abed Foundation(AAF) Established in 1982 to commemorate the work of late Mrs. Ayesha Abed Provides livelihood opportunities for women in remote rural areas including

financial and technical assistance Trains workers to sustain indigenous crafts. Head Office

PC

SC SC

PC

SC SC SC

Ayesha Abed Foundation (AAF)

13 Production Centers

637 Sub Centers

Ayesha Abed Foundation(AAF)

Supplies Aarong with large scale services such as tailoring, embroidery, block and screen printing, Batik, packaging etc.

More than 60% of goods is supplied to Aarong by AAF.

13 Main Centres

647 Sub-centres

Growth: Creating Structure and Sourcing

Aarong

Ayesha Abed Foundation

Independent Producers

Aarong Production

Centre

Value addition by design development, quality control and retailing

Sources products from

• Aarong: 1,769; 60% women• Ayesha Abed Foundation: 34,178; 100% women• Independent Producers: 28,270; 65.3% women

Pioneering Development of Crafts

Story of Stitches – An Exhibition on Art of Nakshi

Kantha (2008)

Pioneering Development of CraftsStory of Pride- An

exhibition of Jamdani Sarees

Artisans and Aarong

Aarong

IT & Software

Quality Assurance

Access to Finance

Training

ExportRetail & Infrastructure

Design & Product

Development

Marketing

Producer Relation

Production Efficiency

Offers one-stop shopping location from clothing to household items, gifts and fashion accessories to children’s toys.

The profit generated from Aarong ploughed back for BRAC’s development initiatives both economic and social such as free health programs, micro credit, legal services, education etc.

Aarong Centre Aarong Centre, the

administrative support and bridging between retail and artisans

Product research, design, and development

Quality Assurance to Marketing

Training to Access to Finance

Aarong Today• Nation’s leading

lifestyle brand• Over 100 product

categories• Flagship outlet in

Uttara• Supports about 65,000

artisans in various sectors, over 80% women

• Profit ploughed back to BRAC’s development initiatives i.e. education, health, microcredit, legal service etc.

22.14

29.56

14

7.24

7.34

7.11

7.11

1.18 2.68

5

% Sales

Men'sWomen'sChildrenHome Decor (tex-tile)Home Décor (non-textile)JewelleryLeatherBeautyNakshi KanthaJamdani

Retail Space19

78

1983

1984

1985

1986

1988

1989

1990

1995

1997

1998

2001

2002

2007

2008

2009

2010

2011

2012

2013

1.6

3.1

6.1

7.8

11.3

13

.3

21.9

19

.9

22.9

38

.0

42.4

50

.7

67.2

71

.8

79.1

111.

1 12

9.5

174.

4 17

4.8

194.

1

Total area (in thousand sq ft)

Aarong Today: Stats• Average profit margin 14.93%• Average basket Tk. 1,473• Conversion rate 43%

2008 2009 2010 2011 2012

24002700

3395

41504530

REVENUE

Sales (in TK. Million)

2010 2011 2012

5.5

6.8 6.7

Footfall in million

Aarong’s Customer Profile

My Aarong Rewards Programme: 20, 432 customers

Customer Approval in 2012• Served 21 thousand customer per day;• Average operation in all Aarong outlets, 332

days;• Sold 13.2 million taka worth of handicrafts each

day ;• 2.58 products per invoice;• Approximately 5% of revenue from foreigners;• 3rd largest Facebook fan base in BD;

Exporting Handicrafts• Aarong exports mainly to Europe and Japan• Member of World Fair Trade Organization (WFTO),

Tradecraft, Banglacraft and Bangladesh Craft Council• Export revenue Tk. 66 million in 2012

Recognition and Awards

Aarong as Fashion Trendsetter

Way Forward• Two new outlets in 2013: Narayanganj and

Jamuna Future Park• Launch new software and customer web-

interface for My Aarong Rewards programme • Gulshan outlet will be shifting with a new look • Launch e-commerce in Bangladesh and later

phase, expand service to international market• Ground work being done for Aarong Global • Handicrafts from Afghanistan

Thank you

On 40th anniversary of BRAC, Sir Fazle Hasan Abed labeled gender inequality as the “greatest injustice in human kind”. He added, “Gender equality remains the greatest unfinished agenda not only of my life’s work but of our time.”