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Life-improving products like water filters and solar chargers for mobile phones are being stocked alongside soft drinks and soaps in hundreds of rural villages in southern India. These goods and gadgets are flying off shelves and making their way into village homes.
“We have seen demand increase and we have seen adoption happen,” Diana Jue said. She co-founded the social enterprise Essmart with Jackie Stenson in 2012. It specializes in last-mile distribution.
“Most courier, or transport, companies in India go as far as Tier 3 or Tier 4 towns and cities.” Jue said. “If you try to get those companies to go into more rural areas, they won’t. It’s just not efficient for them.”
So Essmart receives drop-offs in bulk to their six distribution centres, located in Tier 3 and 4 towns (populations below 50,000 but over 10,000), from more than 20 suppliers. From there, a team of full-time sales executives make deliveries by motorbike to family-owned retail outlets, known as kirana shops, in the Essmart network. These sales executives visit shopkeepers every couple of days. And they’re always a phone call away, ready to answer questions or fill new orders.
This process saves the thousand shopkeepers in the Essmart network both the trouble and time of having to shut their doors and travel to larger city centres to resupply. And because life-improving products are in demand, kirana shop owners do quite well and often see their monthly earnings increase by 20 percent. That’s significant and Essmart’s catalogue and virtual inventory erases the greatest challenge for rural retailers: a lack of working capital for inventory.
Lighting products like solar lanterns or rechargeable torch lights have always been best-sellers.
“These products attract a lot of attention,” Jue said. “They’re also products that are very much in need, because in the areas where we work there are power cuts all the time, or there are houses that are not connected to the grid at all. People understand that they can’t do things when it’s dark.”
In developing the product catalog, which has more than 60 items and changes based on customer feedback, the Essmart team has learned that rural villagers are absolutely willing to invest in high quality products, even if they’re tight on cash. The 2,300-rupee solar lantern, for example, far outsells the 650-rupee version: it’s not only brighter and more durable, it also has USB ports to charge mobile phones.
Essmart sales executives run hands-on demonstrations for products that are less intuitive and those which are being introduced to villages for the first time. “It’s part spectacle and part education,” Stenson said. “You want to show off these products and show how exciting they are but also explain to consumers why these products are great alternatives to what may currently be out there.”
Shopkeepers in the network—the “vast majority” of whom are men—receive training, too. Stenson and Jue have found that it’s more effective when shopkeepers push life-improving products to their customers instead of sales executives, because shopkeepers are known and trusted in the community. Of course, both co-founders understand that women tend to reinvest more of their income in their communities and Essmart is encouraging participation from women entrepreneurs, and their employees, and offering one-day trainings to get them up to speed.
In the future, Stenson and Jue plan to scale-up across South Asia, sub-Saharan Africa and Latin America. Until then, they’re learning as much as possible from their established supply chain process. They’re experimenting with product marketing and testing alternate methods for completing orders and deliveries.
And for good reason.
“In India, over 90 percent of retail happens in these unorganised, local, mom-and-pop stores,”Stenson said. “Right now, about $500 out of $550 billion in retail spending happens in the kirana shops. By 2025, it’s projected to be $1.6 trillion.”
To date, Essmart and its partner shopkeepers have sold more than 12,000 products to at least 48,000 people. In the process, Stenson and Jue have proven that making a positive impact in people’s lives, or changing fortunes, can be as simple as keeping the lights on.
As for who the Essmart teams reaches out to for advice, Jue said, “We always trust our customers. They’re the ones who keep us alive.”
“At the beginning, when you’re starting off, a lot of people will want to be experts,” Stenson added, offering parting advice to young social entrepreneurs. “At a certain point it’s worthwhile to just ignore what everybody is telling you, build something, design for your customers, and go from there.”
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This article was originally published on Virgin.com