Enterprises

Enterprises (16)

Saturday, 16 January 2016 18:00

Aarong

 

Enterprise

Empowering crafters in a nutshell
As one of Bangladesh's largest fashion retail chains under the umbrella of one of the world’s largest NGOs, Aarong’s flagship outlet also claims the largest retail space in the country as part of its presence in the Uttara district of Dhaka. Fighting to uphold the dignity of the marginalised, this chic brand began as a humble project. After it’s initiation as a project to provide employment for a limited number of rural women through silk production via sericulture and the art of nakshikantha(embroidered quilts) in 1978, Aarong extended its support to rural artisans by investing in their handicrafts for several years into its operations. In the process, it saw the emergence of independent producers and created income generating opportunities for thousands of artisans from communities beyond the reach of BRAC. Weaving together new opportunities for people with the skilled work of their artisans, Aarong has carved out a unique market segment, giving hope to the crafters.

How it all started
When BRAC started its journey in 1972, the initial goal was to serve as a relief operations committee for a designated amount of time. Once its relief operations were underway, BRAC reasoned that providing limited relief to the rural poor was not a lasting solution for them to overcome poverty, as in the newly sovereign Bangladesh almost everything - including the economic infrastructure of the country - was left upturned. After the completion of its relief operations, BRAC shifted its focus to empowering the poor, forming a long term approach to community development. Around 1976, while operating its targeted group approach, BRAC realised that the most disadvantaged groups in poor rural communities were women, and required a route that would empower this group while also   providing income generating opportunities.

BRAC began encouraging silk farming by women in Bangladesh’s Manikganj district. Initially, BRAC had a few scattered buyers in Dhaka, with weeks or even months passing between supply and payment. Today, the process is much more streamlined and efficient as BRAC established Aarong, whose artisans represent the cutting edge of social enterprise. Through BRAC’s innovative approach, the global community now has a prime example of how targeted mobilisation of the poor can support sustainable development efforts, while also generating a financial surplus.

The birth of Aarong
BRAC observed that women in Bangladesh were increasingly involved in agricultural activities. It also recognised that it was the male members of families who marketed the crops and reaped the profits, even though women completed about 75 percent of the agricultural work. In order to create an alternative opportunity to earn an income for these women and contribute to the development of a skilled workforce, BRAC established its sericulture project in 1978 under the leadership of the late Ayesha Abed, former executive assistant director of BRAC.

The sericulture project has supported women in the rural areas of Manikganj in producing high quality silk, and women in rural communities of Jamalpur in producing traditional hand-stitched nakshikantha. However, it soon became apparent that the women producing the silk and nakshikantha did not have sufficient buyers for their products, nor were there any stable platforms for them to market their items. Seeing the opportunity that lay in the challenge, BRAC took the initiative to create a platform so that these women could sell their products to the urban market. Thus, Aarong was launched in 1978, creating a linkage between the rural poor and urban retailers.

Since its inception, Aarong, which means 'village fair' in Bengali, has been working towards BRAC’s mission of poverty alleviation through economic development and human capacity building, with a specific focus on the empowerment of women. The retail process follows several steps: first, a design team conceptualises the season’s motives which are then sent to the rural artisans for production. Aarong continuously develops the artisans’ skills through training programmes, and conducts quality control of the completed items before they are bought at a fair price and then sold across retail outlets in urban markets. By evolving the traditional retail process, Aarong strives to provide a uniquely Bangladeshi lifestyle experience while encouraging social change. A newly generated demand for Bangladeshi handcrafted products illustrates that Aarong has achieved this vision, and continues to challenge the retail industry with its sustainable fashion ‘revolution’.

Continuing the legacy through an extended reach
After the death of Ayesha Abed, her family members founded the Ayesha Abed Foundation (AAF) in 1982 in her honour to continue her projects’ operations. AAF gathers and organises both the skilled and previously untrained artisans from various village organisations across the country and provides them with training and employment; its numerous centres serving as Aarong's production hubs. The foundation currently has 13 centres and 541 sub-centres spread across Bangladesh.

The co-existence of Aarong and the Ayesha Abed Foundation, both geared towards the same ambition, made an extensive support system for artisans all over the country a reality. Through this system, independent producers conducting fair trade with Aarong are encouraged to organise other artisans from their communities, including those communities which BRAC’s services have not yet reached. Today, there are almost 800 independent producers active in different corners of Bangladesh and working with them are nearly 30,000 rural artisans. Additionally, more than 35,000 other artisans are working at AAF centres, producing and selling goods to Aarong to support themselves and their families, resulting in a total of over 320,000 direct and indirect beneficiaries.

BRAC, Aarong, and Ayesha Abed Foundation’s assistance to artisans
AAF's current services to the artisans include free skill-building, supply of raw materials for production, transportation of goods, quality control, storage, management, finance, marketing, and microfinance loan options through Aarong. Working mothers have access to day care centres for their toddlers while they work, and senior workers receive a retirement benefit. AAF employees in rural communities also obtain various support from BRAC, including micro-credit services; seeds, agriculture, poultry, livestock, and fisheries inputs; free schooling for their children; subsidised tube-wells and sanitary latrines; health care including free eye check-ups and glasses, free treatment of tuberculosis and severe illnesses and health education; as well as legal awareness and support.
Currently a health security scheme for artisans and their family members is being piloted to protect artisans against catastrophic health expenditures.

In addition to being trained, women recruited by AAF benefit from a living wage and job security. The workspaces are often right at the doorsteps of the artisans, to enable them to mainly work from home while being able to look after their families.

Taking into account the specific needs of its employees illustrates how Aarong through AAF has always infused a conscious effort to address issues such as the environment, gender-specific needs, safety, security and most importantly - the empowerment of women.

Village fairs in urban landscapes
Aarong’s primary customers are mostly from middle and higher socio-economic classes living in urban areas.Aarong’s retail outlet is particularly renowned amongst expatriates and foreign visitors. Today, Aarong owns  15 retail chain outlets in Bangladesh,  nine of which are in Dhaka, two in Chittagong, one in Sylhet, one in Narayanganj, one in Khulna, and one in Comilla. Not only has Aarong been a trendsetter in the local fashion industry, with the Uttara flagship store claiming the title of the largest retail outlet of a single brand, but it is also a pioneer of its kind in entering the global market, having opened a franchised outlet in London in 2001, and planning the extension of its e-commerce website to international markets in the near future. Aarong offers a wide variety of products and designs in its outlets including embroidery, block and screen prints, tie-dyes, vegetable dyes, batik, block cuttings, furniture, wall mats, toys, pottery, metal works, jewellery, leather products, candles, handmade paper and paper products.

Merchant of a lifestyle in favour of the environment and sustainable development
Aside from its significant contribution to the expansion and popularisation of the cotton handloom industry, Aarong has given rise to a greater demand for locally manufactured fabrics, which in turn has played a vital role in reviving the almost extinct traditional jamdani (woven cotton fabric), muslin (loosely woven cloth) and nakshikantha. Committed to being environmentally friendly, Aarong has also introduced dyes free from AZO (restricted aromatic which may be harmful to skin) and PCP (used for chlorination, also deemed harmful) in its cotton fabric production.

In addition to redistributing 50 percent of its profits throughout BRAC’s development programmes (keeping the remaining 50 percent to sustain its own operations)Aarong’s own consumption of raw materials sustains numerous artisan communities in Bangladesh; Aarong buys 75 percent of cotton produced in Madhobdi, the core cotton production area in Bangladesh, and over 70 percent of silk produced in Maldaha.

Beyond 2015
Aarong started out with the goal of supporting poverty stricken rural women so that they could empower themselves by utilising and further enhancing their skills. That goal remains to this day, with its scope having broadened to extend its services to more of the rural poor and urban markets. Aarong plans to launch an international e-commerce site to serve global markets and is looking to expand to more cities domestically and internationally.

Aarong's Timeline

1978 – Opened its first retail outlet in Dhaka, Bangladesh
1982 – Established the Ayesha Abed Foundation, a network of production centres        
1983 – Opened a retail outlet in Chittagong, Bangladesh       
1985 – Opened a retail outlet in Sylhet, Bangladesh       
1987 – Entered the export market       
1995 – Opened a retail outlet in Khulna, Bangladesh       
1999 – Participated in its first international fashion show        
2001 – Launched a retail franchise in London, United Kingdom       
2003 – Launched its sub-brand ‘Taaga’, women’s western fusion wear
2007 – Received Fair Trade certification from World Fair Trade Organisation         
2008 – Celebrated its 30thanniversary with an exhibition series and fashion gala
2009 – Received ‘Best Brand’ award from Superbrands       
2011 – Opened its flagship outlet in Uttara, Dhaka, Bangladesh       
2012 – Opened a retail outlet in Comilla, Bangladesh, received UNESCO Award of Excellence
2013 – Launch the Artisan Development Initiative, a BRAC holistic development programme
2014 – Opened a retail outlet in Jamuna Future Park, Dhaka, Bangladesh, launched e-commerce website, launched furniture line ‘Rattan’ and product line ‘Maternity Taaga’
2015 –Opened retails outlets in Dhanmondi and Banani, Dhaka, Bangladesh


Download: Factsheet

Saturday, 16 January 2016 18:00

Overview

The beginning
In 1978, BRAC’s flagship social enterprise, Aarong, was created as a support mechanism to BRAC’s existing sericulture programme so that the hand-spun silk they were creating could be successfully marketed at a larger scale. Aarong was established as a retail distribution outlet that offered a fair price to the rural suppliers while introducing the products to urban markets where both demand and consumers’ willingness to pay were the highest. Today, Aarong has transformed into a high surplus generating enterprise, operating as one of the largest retailers in Bangladesh. Other BRAC enterprises also came into existence at various times in similar efforts to create economic space for the poor. Although most of the BRAC enterprises were formed as programme support enterprises, majority of them currently operate as surplus generating ventures while maintaining their ongoing commitment toward alleviation of poverty via empowerment of the poor. Today BRAC operates 16 financially and socially profitable enterprises, across health, agriculture, livestock, fisheries, education, green energy and retail sectors, making significant contribution to local economy through creation of market linkages, entrepreneurs and employment opportunities. By targeting profitable and scalable businesses, BRAC enterprises are able to fullfill their social missions at a much greater scale while increasing financial surplus that reduce the organisation’s donor dependency and support BRAC’s development programmes and other innovations at a greater level. That is why BRAC enterprises continue to exist, expand and innovate through across multiple sectors.

 
The BRAC ethos of social entrepreneurship, the '3Ps': people, planet, profit
BRAC Enterprises strive to strike the right balance between financial surplus and social returns in order to achieve the targeted double/triple bottom lines. By operating as a surplus generating organisation that aims to alleviate poverty through its business operations and supply chain, BRAC succeeds in implementing its vision to serve society in a profitable manner.

Although all of the BRAC enterprises are committed toward achieving financial, social and environmental returns, BRAC takes a unique approach in defining its triple bottom line by focusing on three ideals: people, profit and the planet (the '3Ps'). A BRAC enterprise must meet three criteria in order to be considered a successful and sustainable business:

    It must serve the needs of poor people
    It must be environmentally friendly, and
    It must make surplus to help keep BRAC’s development works sustainable

Social enterprise – our objective
BRAC takes a holistic approach in conceptualising and developing each of its enterprises. As BRAC enterprises have expanded from programme support mechanisms to surplus generating enterprises with financial and social missions, each enterprise has ensured that it complies the four fundamental objectives of a BRAC enterprise:

    Creating job opportunities
    Generating surplus for BRAC in order to minimise donor dependency
    Ensuring long-term support and contribution toward the sustainability of BRAC’s development interventions such as microfinance, education and skills development etc.
    Becoming viable investments in the long run in order to act as ‘hedge’ against future liquidity

 
Advantages gained from social enterprises
Through its unique model and integrated operations, BRAC achieves five distinctive advantages across its enterprises:

Synergy
The integrated network of BRAC Enterprises, Development Programmes and Investments together beget a unique synergy and essentially create a 2 2=5 Effect. The surpluses generated by the social enterprises make BRAC more self-sustaining so that increasing numbers of poor people can become self-reliant.

Cross collaboration
BRAC enterprises maximise synergy, impact and value by their targeted outreach and integrative products and services across multiple enterprises.

Cross subsidy
Although BRAC enterprises aim for financial returns while fulfilling the social and environmental missions, not all enterprises are equally profitable. The cumulative surplus from BRAC enterprises combined are used to re-invest in the BRAC enterprises and support the development programmes, on an as needed basis, not on a pro-rata basis across enterprises.

Continuous innovation
BRAC’s extensive network of enterprises with the capacity to address major social needs allows BRAC to continually identify needs and create innovative solution to fulfil that need and create necessary market linkages.

Holistic support
Because of its integrated network and unique model, BRAC has the advantage, ability and capacity to provide holistic support and truly take care of its stakeholders, i.e. the entrepreneurs involved with the BRAC enterprises.

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