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.

1. COMMERCIALIZING
A
HANDWASHING
DEVICE
IN
RURAL
VIETNAM
Global
Young
Leaders
Programme
Ho
Chi
Minh
City,
Vietnam:
November
2010

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. 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. 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. Overview
i.
ii.
Vietnam:
Country
Background
Objective

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. 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. 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. 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. 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. 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. 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. The
Case
for
Commercializa@on
i.
ii.
iii.
iv.
v.
Value
Proposition
Introducing
the
Hand
Washing
Device
Venture
Concept
Social
Benefits
Market
Opportunity

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. 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. 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. 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. 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. 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. 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. 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. 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. Business
Plan
i.
ii.
iii.
iv.
Business
Model
Production
Plan
Sales
&
Marketing
Strategy
Risk
Management

24. Business
Model
i.
ii.
iii.
iv.
v.
Strategy
Key
Partners
Value
Proposition
for
Key
Partners
Business
Model
Design
Critical
Success
Factors

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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. Sales
&
Marke@ng
Strategy
i.
ii.
iii.
iv.
v.
vi.
Opportunity
Target
Market
Value
Proposition
&
Brand
Strategy
Sales
Process
Implementation
Strategy
Sales
Projections

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. 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. 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. 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. Visual
Iden@ty

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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. Opera@onal
Plan
i.
ii.
i.
ii.
iii.
Supply
Chain
Sourcing
&
Fulfillment
Distribution
&
Logistics
Inventory
Management
Partner
Selection
Criteria

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. 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. 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. 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. 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. Distribu@on
Model
Production
Women’s
Union
Province Level
District Level
Commune Level
Happy
Team
Households

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. 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. 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. Risk
Management
i.
ii.
iii.
Risks
&
Mitigation
Contingency
Plan
Exit
Strategy

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. 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. 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. 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. Management
and
Governance
Objectives
of
Governance
General
Governance
Principles
Corporate
Governance
&
Management
i.
ii.
iii.

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. 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. 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. 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. Phase
2
&
3:
Proposed
Organiza@on
Structure

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. 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. 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. 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. Financial
Plan
i.
ii.
iii.
iv.
v.
vi.
Key
Points
Pricing
Structure
Capital
Requirement
Financial
&
Volume
Projections
Scenario
Analysis
Recommendations
&
Conclusions

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. 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. 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. 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. 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. 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. 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. 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. 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. 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. Appendices
i.
ii.
iii.
Key
Assumptions
Payment
Process
Financial
Spreadsheets
Attached

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. 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. 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. 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)