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.