At first glance, São Paulo-based Marcel Fukayama sounds like a pretty hapless consultant. He’s not especially interested in the success of his clients’ businesses, he has zero concern for most of their current consumers, and he has no problem telling them when their market strategies stink.
So how he counts the likes of Microsoft and Coca-Cola among his client list is something of a mystery. That’s until you realise that he is privy to an even bigger mystery. An inaugural Skoll Foundation Young Leader, Fukayama has hands-on experience of how Brazil’s low-income markets work – something that still eludes big business for the most part.
Today, the 29-year-old Brazilian is chief executive of the international non-profit CDI Global (formerly the Centre for Digital Inclusion). But he cut his teeth running one of Sao Paulo’s first internet cafés. He was just 17 years old at the time.
Fukayama quickly developed a line in Nescafé-branded coffee and ice cream, as well as Intel-sponsored computer games. But for the young social entrepreneur, it was always meant to be more than just a moneymaking enterprise. Working with a local financial institution, he introduced basic online banking. He provided customers with access to a range of ‘e-gov’ services too.
The experience set him up well for his next challenge. Joining CDI in 2009, he was tasked with bringing microfinance, micro-insurance and education products and services to internet cafes across the country. Within a couple of years, he helped build a network of around 6,500 participating cafes – most of which operated in low-income communities.
“We realised that we had a huge asset, what with our network, knowledge and unique experience,” Fukayama said, explaining his recent decision to set up a consulting business within CDI’s social enterprise arm, known as CDI Ventures.
Among CDI’s first clients was Microsoft. At the time, sky-high piracy rates were eating into the US software giant’s margins. On CDI’s advice, Microsoft slashed its Windows licensing fee for internet cafes by about 80%. Legitimate sales quickly increased.
The Japanese printer manufacturer Epson faced a similar dilemma. In Brazil, its traditional business model – selling printers cheap, but making it up on pricey ink cartridges – proved a major non-starter. No sooner did Epson arrive than counterfeiter cartridges started hitting the market.
Working with CDI, Epson reconfigured its design so that its printers could contain higher volumes of ink. That made the ink more affordable and, in turn, made Epson’s business model more viable.
Fukayama insists that CDI’s motivation remains to help improve the lot of low-income consumers, not to increase sales for large companies. But he’s a realist. If the latter can help the former, then that’s fine with him: “We have our values and principles, but we do believe that you can’t change the world and build a new economy if you exclude large international companies.”
Take Coca-Cola, he says. The US beverage firm worked with CDI in Brazil to develop an employability program that trains young people to become apprentices with local retailers. After the partnership, the US brand set up a social business division within its Brazil operations to try and identify other opportunities for creating 'shared value'.
“That’s a major shift for a company like Coca-Cola, which is not thinking just about selling Coca-Cola, but also how to sell it in a more sustainable way,” Fukayama said.
In a similar vein, CDI ran an outreach program with electricity distributor Light targeting the residents of Rio de Janeiro’s favelas. The door-to-door awareness campaign focused on persuading homeowners to adopt energy-efficiency measures, such as installing low-energy bulbs and not using their refrigerators as air conditioners.
For Light, the initiative was also geared towards reducing rates of illegal grid connectivity too – a measure that clearly has important commercial implications for the company, but that also promised real public safety benefits as well.
As management consultants go, Fukayama shows an uncharacteristic ability to heed his own advice. Despite building up an impressive programme among internet cafe owners, the market had moved on. Today in Brazil, it’s now all about mobile connectivity, not fixed PCs. CDI has responded by developing a 10-week training programme to teach young people to design smartphone apps.
Starting in six poor communities in Rio, the initiative places a strong emphasis on solutions to relevant community needs. Fukayama gives the example of an app to alert the authorities to sanitation problems or to report power failures. But he’s reluctant to second-guess the students: “The methodology is to empower them; they are the protagonists. The solution is not with CDI or any company; it’s in their community.”
At the end of the course, the young people are invited to pitch their ideas to the course sponsors, which include telecom firms TIM Brasil and Brasil, among others. The plan is that the apps will, in time, generate income for the student developers as well as for CDI.
For Fukayama, the program signals a strategic reorientation from “digital inclusion to digital empowerment”. All sound a tad jargonistic? Well, there are some things no consultant can escape, however unorthodox their mission.