By Shameen Prashantham and Fan Wu

In the bustling world of social entrepreneurship, Shenzhen Power Solution (SPS) stands out as a remarkable success story. Founded in 2009 by Xia (Susan) Li, SPS has been on a mission to bring affordable green energy solutions to off-grid communities in Africa. It's truly astonishing how Susan transformed this small Shenzhen-based startup into a force to be reckoned with, even earning the prestigious “Social Entrepreneur of the Year” title at the 2024 World Economic Forum. But the journey wasn't without its obstacles. How did she navigate the complex challenges of building a business from scratch and making it thrive in a foreign and resource-strapped market?

In today's exclusive case study, winner of the 1st Prize in the 2024 Global Contest for the Best China-Focused Cases, CEIBS Professor of International Business and Strategy and Associate Dean (Africa) Shameen Prashantham takes us inside this illuminating social enterprise to explore: How can social entrepreneurs balance social purpose and economic viability in today's complex global market? How can they forge win-win partnerships with multinational corporations and local businesses? Is building localised supply chains a necessity for international expansion?

From Humble Beginnings to Global Recognition

Susan Li's journey began in a poor rural family in Heilongjiang province, China. Growing up with a single mother, she experienced firsthand the hardships of living without a stable power supply. These early experiences shaped her determination to make a difference in the lives of others.

After working her way up in the corporate world, Susan founded her first company, a trading company in Shenzhen, in 2004. But a trip to India in 2007 would change the course of her career. Seeing the poverty and lack of access to electricity in the country’s slums, she was inspired to use her business skills to help those in need.

In 2009, Susan founded SPS as a side project to explore the feasibility of using solar energy to power off-grid regions. Starting with just one employee, she faced numerous challenges in the early days of the company. But her perseverance and innovative spirit paid off, and SPS gradually gained traction in the market.

Harnessing China's Expertise for Africa's Future

Based in Shenzhen, sometimes referred to as China’s Silicon Valley, SPS was able to leverage China's expertise in solar energy. The city's strategic location, favourable government policies, and robust supply chain provided the perfect backdrop for SPS's growth.

China's solar industry had experienced rapid growth since the mid-2000s, thanks to both government incentives and an overall focus on innovation. SPS capitalised on this by establishing its own solar product plant in China in 2012. This allowed the company to produce high-quality solar products at competitive prices, making them more accessible to off-grid communities in Africa.

Pivoting to Serve Off-Grid Africa

Initially, SPS targeted the markets of South Asia and Southeast Asia. However, as the infrastructure in these regions improved, Susan realised that there was the greater need for solar energy lay in Africa. With an estimated 789 million people living off-grid in sub-Saharan Africa, the continent presented a huge opportunity for SPS to make a real impact.

But entering the African market was far from easy. SPS faced numerous challenges, including a lack of awareness about solar energy, limited access to financing, and a complex regulatory environment. To overcome these challenges, Susan and her team focused on developing affordable and durable solar products that met the needs of off-grid communities.

One of SPS's most successful products is the "Candle Killer," a portable solar lamp that provides clean and affordable lighting. Inspired by the legendary Chinese craftsman Lu Ban, the "Candle Killer" was designed to be simple, durable, and easy to use. With a price tag of just US$5, it was a game-changer for many families in Africa, who had previously relied on kerosene lamps and candles for lighting.

This wasn't just product development - it was economic alchemy, converting:

• Kerosene budgets (avg. $1/month)→ Solar savings ($1/year)
• Toxic smoke → Clean light (3x brighter)
• Disposable mindset → 5-year lifespans

Nurturing the Business in Africa

As SPS gained a foothold in the African market, Susan and her team continued to innovate and expand their product portfolio. In 2018, they developed "Solar Media," a solar-powered device that provides educational content to off-grid communities. This was a significant step forward in SPS's mission to empower local villagers and meaningfully improve their lives.

To make their products more accessible, SPS also adopted a "PAYGO" (pay-as-you-go) business model. This allowed customers to pay for their solar products in instalments, making them more affordable for low-income families. Through partnerships with local organisations and distributors, SPS was able to build trust and gain acceptance in the market.

In addition to product innovation and business model development, SPS also focused on building an ecosystem of local partners. By working closely with local facilitators and distributors, SPS was able to better understand the needs of the market and tailor its products and services accordingly. This approach not only helped SPS to grow its business but also had a positive impact on the local communities it served.

Challenges Ahead: Scaling Up in a Changing World

Despite its success, SPS faces several challenges as it looks to scale up its operations in Africa. One of the biggest challenges is expanding the product portfolio and customer segments. While SPS has been successful in serving low-income families in off-grid areas, there is a growing demand for solar-powered tools and commercial equipment. To meet this demand, SPS needs to invest in research and development and expand its product offerings.

Another challenge is localising the supply chain in Africa. Amidst the COVID-19 pandemic and ongoing geopolitical uncertainties, it became increasingly important for SPS to reduce its reliance on imports and establish local production and warehousing facilities. This will not only help to reduce costs but also improve the company's resilience to supply chain disruptions.

Finding suitable talent and investors is also a major challenge for SPS. As a social start-up, SPS needs to attract individuals who are passionate about making a difference in the world and are willing to work in a challenging environment. At the same time, SPS needs to raise capital to fund its growth and expansion plans. This requires the company to find impact investors who are aligned with its mission and values.

Finally, SPS needs to seek other large corporate partners to help it scale up its operations. While a partnership with TotalEnergies has so far proven successful, SPS needs to find more partners who can help it to expand its market reach and increase its impact. This requires the company to develop a clear value proposition and demonstrate the potential for mutual benefit.

Professor's Comments: Insights from SPS's Journey

The writing of the Shenzhen Power Solutions case was the result of a remarkable chain of events: Susan Li’s social entrepreneurship award in Davos, her openness to connecting on LinkedIn, her invitation to speak to CEIBS MBA students, and numerous subsequent interactions. Susan’s impact as a Chinese social entrepreneur in Africa - providing affordable green solutions for people without access to electricity - demonstrates that business can be a force for good and contribute to the United Nations’ Sustainable Development Goals (SDGs). We hope this teaching case will enlighten and inspire students around the world.

SPS's story offers valuable lessons for social enterprises and entrepreneurs worldwide. First and foremost, it highlights the importance of identifying a real need in the market and developing innovative solutions to meet that need. Susan Li's personal experience and empathy for those living in poverty inspired her to create SPS, and her focus on affordability and sustainability has been key to the company's success.

SPS’s journey offers three key insights for mission-driven ventures:

1. Frugal Innovation ≠ Compromised Quality

Susan’s "Candle Killer" proved that ultra-affordable products can be durable and transformative. By leveraging Shenzhen’s hardware ecosystem, SPS achieved cost efficiency without sacrificing reliability - a model for serving low-income markets.

2. Localise to Scale

SPS’s shift from exporting to African assembly (e.g. with Ethiopia JV) underscores a truth: Solving last-mile challenges demands embedded local presence. Partnerships with distributors like Third Wave Power also highlight how trust-building unlocks adoption in informal economies.

3. Hybrid Partnerships Are Key

The TotalEnergies deal revealed tensions between corporate scalability and grassroots affordability. Yet, such alliances - when carefully negotiated - can amplify impact. For social enterprises, "double bottom-line" collaborations (profit + purpose) with multinationals may be the fastest route to scale.

The Road Ahead: As climate urgency grows, SPS’s blueprint - frugal design, localised ecosystems, and unconventional partnerships - offers a template for businesses tackling inequality. Susan’s next test? Proving that solar energy can be both a tool for poverty alleviation and a sustainable business.

Shameen Prashantham is a Professor of International Business and Strategy and Associate Dean (Africa) at CEIBS. He’s also the author of Gorillas Can Dance: Lessons from Microsoft and Other Corporations on Partnering with Startups.