The circular economy model is inspired by naturally occurring cycles, where waste becomes nourishment for other living beings. A circular economy seeks to rebuild capital, whether this is financial, manufactured, human, social, or natural. This ensures enhanced flows of goods and services. The model proposes that businesses should improve their processes through innovation to create products and services with a minimum strain on natural capital, and keep the flow of resources going, i.e. recycling.
When cousins Henrik Smedegaard Mortensen and Niels Bonefeld got their idea of shipping scrapped bicycles from Denmark to Mozambique they had no clue what the impact of their vision would be. Since 2007, Baisikeli has set up two bicycles shops in Copenhagen – repairing, renting and selling primarily second-hand bicycles – and one bicycle workshop in Beira, Mozambique – fixing and selling second-hand bicycles. Since its beginning Baisikeli has doubled its earnings every single year.
Circular economy terminology is not part of their language because there is not much room for theory in their business model, as the owners themselves admit. But for many others, Baisikeli is one of the business examples of what a circular economy model would look like in practice: Instead of the take, make, and dispose business-as-usual model, Baisikeli invests in prolonging the life-cycle of discarded bicycles and sells them for a profit, after refurbishing them in their shops in Copenhagen and Beira. The profits are channeled into developing a cycling culture in Mozambique, by setting up a fully-functioning shop for repairs and sale of bikes.
Discussing the Baisikeli business model with its owners and founders, Worldwatch Institute Europe has observed some essential steps that Baisikeli has developed and tested over the years; steps that can translate the concept of circular economy into a practical, profitable project suited for the organisation.
“Baisikeli” is the swahili word for bicycle. The founders of the small bicycle shop in Denmark have developed their business model around the idea of spreading the cycling culture in rural Africa, based on their vision for a future prospering continent where growing urban development and owning a bicycle could mean “healthier cities and happier, closer people”.
With estimated earnings of DKK 15 million this year, Baisikeli plans to open a new workshop in Mozambique and increase the rate of shipping of scrapped bikes significantly in order to meet the growing demand for their products. Part of their project this year is putting an education program in place where they would train what they hope to be their future workforce when expanding in Mozambique. Without foreseeing it, their passion for social innovation has become a catalyst for business growth, making it possible to realize their ambitions for sustainability.
Baisikeli’s business model is pretty straightforward: buying bicycles from insurance companies in Denmark and collecting discarded bicycles for the Copenhagen municipality, refurbishing and selling the good ones in their shops in Copenhagen and shipping the rest as scrap to the African shop for repair and sale. Profits made in Denmark have been used so far to finance their bicycle start-up in Beira, which is expected to become self-sustaining this year.
Their business model meets the needs of rural residents in Mozambique for affordable transportation, while at the same time providing for their conscious-minded customers in Denmark who “think that by buying, they are being part of a bigger objective. It’s not the reason why they come here but it is an add-on”.
Developing a cycling culture in Mozambique
As the owners admit, progress has been made at micro-level and it is quite costly; getting where they are now took “a lot of work and it cost a lot of money, but it’s been also very meaningful”. Sales at the bicycles shops in Copenhagen have been boosted by the free publicity approach at Baisikeli: owner and sales representative Henrik Smedegaard Mortensen has been keen on sharing their story, and most of all, their vision of transforming the African transportation culture, through various media appearances. Their outreach strategy was simple and truthful; telling the story how it is, and sharing their vision with their customers in Denmark. As a result, Baisikeli has become well-known in its business, converting itself into a financially-strong contender on the Copenhagen market.
The present article is a preview for a forthcoming report by Worldwatch Institute Europe, which aims to uncover some essential steps tested by European businesses in pushing their organisations forward, to innovate for sustainability and to make a profit on it.