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Updated May 24, 2019

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Essmart

Fixing Rural Retail’s Broken Supply Chain

http://www.essmart-global.com/
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Essmart Global

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Stage 5: Scaling

Essmart is already operating in southern India. We currently operate six Distribution Centers in Tamil Nadu. These Distribution Centers have built a combined network of over 1,100 retail shops that have sold over 15,000 products. Each product typically impacts an entire family or business, and so we estimate we have impacted over 60,000 individuals (based on the average Tamil Nadu household size of four). Essmart has 43 employees, most of whom are employed out of the villages in which we work, thus providing employment in rural areas. Prior to launching operations, Essmart’s co-founders had been researching the technology dissemination challenge for four years, and we began testing, validating, and refining Essmart’s model in January 2012. Most recently, Essmart has built an inventory management system that 1) works offline, in the world’s remotest settings, and 2) allows for the flexible movement of products up and down the supply chain, to facilitate the distribution and adoption of durable products. This system is uniquely integrated with our operations and will enable us be data-driven as we scale.
Overall, Essmart has three types of users/testers who are impacted by the innovation: 1. Customers of Essmart’s life-improving products. So far, Essmart has reached over 60,000 rural customers through the commercialization of life-changing technologies. By visiting a local village retail shop, rural households learn about new products that address many of their needs. By purchasing one of these products, they are able to reap that product’s benefits. For example, customers that purchase a solar lantern are able to generate significant cost savings on kerosene, which often account for up to 30% of their monthly income. Customers that purchase a water filter are able to reduce their chances of waterborne illnesses, therefore improving their health and reducing the cost of medical care. Customers that purchase an improved biomass cookstove are able to reduce their fuel consumption and breath easier when cooking. These products all contribute to a healthier, enriched, and aspirational lifestyle for rural Indian consumers. 2. Mom-and-pop rural retail shop owners. Essmart has worked with over 1,100 rural retail stores to commercialize life-changing technologies. Essmart improves these small businesses by increasing their revenues through Essmart’s higher-value products. A shop owner earns $2 profit per average product sold and can increase his annual earnings by nearly 10% in his first year working with us. Additionally, Essmart’s reputation, differentiated product offerings, prompt after-sales service, and product margins incentivize shop owners to continue working with Essmart. Finally, many shop owners purchase Essmart’s products themselves to increase their productivity. For example, many shop owners use Essmart-distributed solar lanterns to keep their businesses open at night or during power cuts. 3. Essmart’s field staff. Each Distribution Center creates employment opportunities for at least six individuals, all of whom are from the areas surrounding the Distribution Center. Distribution Centers are established in Tier 3 or 4 cities/towns, and our employees are from thesecities/towns or nearby villages. Many of our Sales Executives have only a 10th grade education. By working with Essmart, they are not only able to secure a stable income and bonuses to support themselves and their families, but they are also able to continue living in their rural homes as opposed to migrating to the city. We rely on Essmart’s field staffs to provide immediate feedback on what pieces of our operations work and which pieces do not.
Since August 2012, Essmart has worked with over 1,100 to sell over 15,000 life-changing technologies that have impacted over 60,000 people. We have witnessed customers’ willingness to pay and subsequent improvements in lifestyle and business growth as we have continued to grow our model. For example, Sundar, a shop owner in Negamam, a small village outside of Pollachi, Tamil Nadu, has sold over 90 Essmart-distributed products, and has increased his earnings by US$440 (which equates to 15% of an average annual income of a shop owner). He continues to purchase Essmart’s products because he sees a direct contribution to his increase in revenues and appreciates Essmart’s high-quality products and after-sales service. Other stores have even created and financed their own marketing collateral with Essmart’s name and logo, which demonstrates that our brand carries value where we work. Similarly, customers are willing to purchase Essmart-distributed products from Sundar because they see value in the goods for their own lives. For example, an Essmart-distributed solar lantern was used by one customer to replace kerosene in her house at night, and by another customer to keep his roadside restaurant open during power cuts. An Essmart-distributed fuel-efficient cook stove was used by one customer in his tea stall to save on the cost of fuel. These few anecdotes are representative of thousands of other similar stories of those who have benefited from Essmart products.

Registered in United States.

Focus Areas:

Cultivation & Tools, Economic Growth and Trade, Entrepreneurship and 10 MoreSEE ALL

Cultivation & Tools, Economic Growth and Trade, Entrepreneurship, Workforce Development, Clean Cooking, Solar, Economic Empowerment, Gender Equity, Cooling, Heating & Insulation, Human Centered Design, Data/Analytics, Technology and InclusionSEE LESS

Implemented In:

India

IndiaSEE LESS

60,000
Lives Impacted to Date
1
Country Implemented In
Verified Funding
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Innovation Description

Solar lights. Water filters. Clean cookstoves. Despite good intentions, these life-changing technologies are NOT changing lives because these products don’t reach villages. Rural distribution channels are broken. Essmart connects technologies to places where people already shop: mom-and-pop retail stores. In India, 15 million of these stores account for over 90% of retail spending. By working with these stores, Essmart makes life-changing technologies available in rural India.
How does your innovation work?
Essmart connects over 100 life-changing technologies with their intended users through existing mom-and-pop rural retail stores. We first source a catalogue of proven, life-improving technologies. Our Sales Executives then demonstrate our catalogue of products to shop owners and villagers, building relationships with these shops in the process. They maintain relationships with shop owners by providing ongoing marketing and distribution to fulfill any incoming orders. Should any product break, our team provides immediate after-sales service support through facilitating manufacturers’ warranties. In summary, Essmart addresses the challenge of last-mile technology accessibility by providing marketing, distribution, and after-sales service for these products. 1. Education and market creation. Essmart’s Sales Executives and shop owners demonstrate Essmart’s catalogue of products to villagers with the support of Essmart’s print catalogue, product samples, videos, fliers, and posters. Within each of Essmart’s shops, an Essmart-branded section is created. This section includes a hard copy of the catalogue, sample products, and Essmart marketing materials. Sales Executives maintain relationships with the shops while providing ongoing support, such as product training and targeted marketing campaigns. The shops can hold Essmart’s inventory (useful for lower-value products) or generate pre-orders from customers (“virtual inventory,” useful for higher-value products). 2. Distribution: Once product demand has been generated, Essmart’s shops place orders by calling our Sales Executives. Then, Essmart’s Sales Executives physically deliver the products from our Distribution Centers (“hubs” in a hub-and-spoke model, located in Tier 3 cities and large towns) to our shops (“spokes,” located in peri-urban and rural areas) via motorbike. Each Sales Executive owns his own motorbike. You can see a video depicting a day-in-the-life of one of our Sales Executives, Sastha, here: https://vimeo.com/140051959. 3. After-sales service: Should any product break, Esmart provides immediate training, maintenance, and/or replacement through facilitating manufacturers’ warranties. This ensures that users continue to benefit from Essmart’s products and that shops do not take on the burden of returns. Additionally, after-sale service builds rural trust in Essmart, and it mitigates the risk that village customers face when buying a new product by creating a more confident purchasing scenario. The entire distribution process is facilitated by Essmart’s proprietary logistics and inventory management software. Sales Executives place and manage orders using a mobile application that works entirely offline, while each office manage all stock flows and orders using a web interface. Essmart’s unique software is able to handle the bi-directional movement of products that is required for demonstrating, distributing, and servicing durable goods. In addition to being a distributor of life-improving technologies, Essmart is a platform for collecting data about rural Indians’ preferences, spending habits, technological needs, and new product research, testing, and evaluation. Essmart’s data collection service is valuable to product designers and manufacturers who want to modify designs based on real-world feedback, technology suppliers who want to test an existing technology in the Indian market, and international development funders who want to scale up proven solutions. Therefore, Essmart closes the information gap in the international development ecosystem, which greatly multiplies the effectiveness and impact of social impact technologies. Our revenue model includes mark-ups on products, which we buy at wholesale prices, and market testing services for product designers with new technologies or technologies that they’d like to commercialize in India. These research contracts also give Essmart a competitive advantage, as we are often the first to know about new products with direct contacts to the suppliers.

Planned Goals and Milestones

Essmart scales by establishing new Distribution Centers in new geographies in order to expand Essmart’s rural retail network into more villages. Each Distribution Center is able to serve approximately 400 retail stores, which are generally dispersed such that one store serves one village with around 200 households (or, depending on the location of the store, up to 20 villages). By 2018, if adequately funded, Essmart will expand from six Distribution Centers to over 100 Distribution Centers. Through these 100+ Distribution Centers, we will expand our network to over 15,000 stores and will have sold life-improving products that impact over 1.3 million people. Expanding into a new state will give us the opportunity to further refine our model at scale and build the foundation needed to take Essmart’s distribution network India-wide and eventually global. Additionally, Essmart will be growing an additional revenue stream that contributes to the growth of the company and its social impact: market research and testing for product designers of new technologies or technologies entering the Indian market. To date, we have completed seven market research contracts that leveraged our existing distribution network as an experimental sandbox for never-before-seen products in south India. As our network grows, Essmart’s market testing service will become even more valuable as we learn about the preferences of different rural customers throughout India.
Our immediate expansion plan is to enter a new geography, the south Indian state of Karnataka, which borders Tamil Nadu. Second, we are continuing to improve our logistics/supply chain software and mobile app. We’ve recently completed our first phase roll-out, and we’re currently designing our Phase 2 edition. Finally, we’re continuing short-term marketing, training, and operational efficiency experiments on Essmart’s existing Distribution Centers and rural retail stores. These interventions are funded by USAID Development Innovation Ventures and the UN Foundation’s Global Alliance for Clean Cookstoves Women’s Empowerment Fund. Through these experiments, we will gain an understanding of what we can adjust in our current operations to be more cost effective throughout our scaling process.

Milestones

Date Unknown
Created
Date Unknown
Lives Impacted
60,000
Date Unknown
New Country Implemented In
India