As promised in a prior blog post (which also contains the background), here is Part 1 of 2 of my interview with Ajaita Shah (thanks to Amrit Mohan of Frontier Markets for providing some of the answers as well).
Have a look at this brand-new video from CNN featuring Ajaita.
Q1: Let’s start with your company’s Mission Statement and then we’ll get to the good stuff – the projects.
According to Wikipedia, your mission is to provide over 10 million products to 30 million households in India and become a global leader in rural distribution and products for low-income households. FM (Frontier Markets) also trains women (known as "Solar Sahelis") to market, sell, and service renewable energy products in rural Rajasthan. FM has sold 703,000 products, and trained over 5000 entrepreneurs (50% women)
PMI says a project is: ‘a temporary endeavor undertaken to create a unique product, service or result’. A project is temporary in that it has a defined beginning and end in time, and therefore defined scope and resources. Given that,
How do you see the mission in terms of projects (or do you)? Or is this more of an ongoing operation? Do you launch projects? If so, how do you define them in terms of scope, schedule, and time?
Frontier Markets (FM) is a rural distribution company that markets high-impact consumer durables in India through a network of digitised local entrepreneurs with women at the centre of the value chain. FM helps rural communities achieve “Saral Jeevan,” or “Easy Life” by providing targeted, customised product solutions designed with direct input from rural communities. FM developed innovations like a solar torch and home lighting system, solar-powered television with built-in access to a wide range of channels that retails for less than $200, solar-powered poultry farming devices, and induction stoves.
At the core of FM’s model are women leaders and entrepreneurs, called Solar Sahelis. FM’s network of Sahelis is FM’s direct link to remote households. They bring products to customers, relay insights back into FM, and create an ecosystem of shared value and trust between FM and rural communities. By investing in Solar Sahelis’ long-term professional growth, FM helps her develop the skills she needs to understand her customers and meet their needs. FM offers a range of income-generating opportunities and helps her develop the skills she needs to fill these roles. FM’s model is built around women leaders because we believe that they are a bankable investment with the potential to drive deep social change.
To date, FM’s network of 2,500 Solar Sahelis have contributed to 703,000 clean energy solutions sold to 600,000 households, impacting 3.5 MN lives, preventing the release of over 950,000 tonnes of carbon.
FM believes that rural households are the future economy of the world and need their voices to be heard; that providing them access to quality products and services that address their safety, productivity, and aspiration will drive a systemic change to the world. FM believes that investing in women is “Smart Business,” and the KEY to poverty alleviation at scale.
Q2: Who are your stakeholders? Clearly the Solar Sahelis are, but who else? And for our audience, could you tell us about the profile of a Solar Saheli, what they do for you, and what you’ve done for them?
I think it’s best to reply with our Unified Partnership Model: Operating Together for Shared-Value Impact
Government: FM is leveraging the Rajasthan government’s E-Mitra network to digitize orders, build local stock points, and rapidly scale operations in new areas. FM partnered with the government’s National Rural Livelihood Mission (NRLM) initiative to develop a network of women’s livelihood enhancement groups. FM is involved with Niti Aayog to convert Solar Sahelis into recognized business owners.
Civil society organizations (CSOs): FM contributes to CSOs’ financial sustainability by hiring experienced CSOs to train Solar Sahelis. FM recruits Solar Sahelis through the CSOs’ networks, linking the skills acquired through the training to financial opportunities. Through successful partnerships with Barefoot College, Ibtada, Grameen Evam Samajik Vikas Sanstha (GSVS), Manjari Foundation, and Spectra, FM can rapidly expand into new areas and reach more villages.
Companies: FM provides market insights to manufacturers and businesses planning to enter rural markets. After partnering with FM, one manufacturer reported a 15 to 30% decrease in total costs across the value chain and a 2 to 5% increase in net income.
Financial institutions: Through partnerships with financial institutions, FM has co-designed several financial products to test in rural markets, including a model for rural women to access working capital. This model has been net income positive for the last two years, demonstrating opportunities for strong return on equity to investors.
Ecosystem Enablers: Industry platforms like GOGLA gives FM the access to new future partners which include manufacturers. IFC gives FM strategic guidance, access to new partners as well as penetration inside rural villages through its Consumer Awareness Campaign for Lighting India. FM has been engaging with UNSe4All for leadership structures and participating in pushing gender energy access on global platforms. Ashden has helped FM showcase its story.
FM believes innovation lies in the core of its philosophy; deep and targeted linkages between wealth creation and social impact. Empowerment is linked to financial gain. Therefore, FM’s lens is market based to drive value and wealth throughout the value chain; for rural consumers, women leaders, innovative product and service solutions, partners, and employees. The business model is a “bottoms-up” approach with women at the center of design. FM uses an investment lens that is long-term equity vs. short term gains believing this eventually leads to exponential profit with exponential impact. FM invests in a leadership network, and village consumer as an asset class.
Women Leaders: Investment Strategy:
FM invests in women with a belief that she is necessary to drive systemic change. This is because of FM’s understanding of the village ecosystem; in order to introduce high impact high, quality products that are costly, there is a behaviour change that women can drive because women are emotionally connected and build trust in communities. Enabling them to drive behavioural change faster. FM recognized that:
- Women are the only ones who can enter into a rural HHs door without someone complaining
- Women are the only one that can sit on the phone longer than 5 mins and get more insights out
- Women give you 13 more data points then men
We invest in women leaders, not sales agents. Therefore, we invest heavily in her capacity, support her in marketing, and do it in incremental ways to ensure it’s effective giving her the time to become confident in what she is doing and investing the next.
Skill-development training: FM collaborates with CSOs that specialize in rural livelihood education to provide appropriate and targeted training to develop Solar Sahelis’ digital, financial, and marketing skills.
Continued support: After training, FM provides continuous operational, marketing, and coordination support for Solar Sahelis.
Tools for success: FM invests in Solar Sahelis by providing demo kits, stock, and helps her access capital to grow her business faster.
The long-term investment strategy is to develop her resume, to build her ability to access capital on her own, to build her credit history and justify returns through outcomes.
Take a long-term approach to investment: FM’s interventions generate life-time value for customers in the form of durable, high-quality, and context-specific products with reliable after-sale service plans. FM provides Solar Sahelis with skills and opportunities to sustainably generate income.
Diversify income sources for the rural workforce: FM involves Solar Sahelis in a wide range of wealth-creation opportunities, which has created a 400% increase in her income level over the past 4 years. She can also leverage the skills she acquires with FM to gain employment with firms.
Leverage data: FM’s evidence-based approach contributes to better decision making, faster response to market changes, and deeper insight into rural communities. FM reduces the costs of working in remote villages by collecting data through its call center and is currently developing a mobile app to improve connectivity.
Take a bottom-up approach: FM listens to rural customers because they are experts on their own needs and aspirations. By collecting feedback and insights from customers, FM created a product basket that is tailored to meet the needs of rural customers and designed an effective after-sale service plan.
Create a customer-centric model: FM selects products based on the needs of the rural customers. If the product doesn’t exist, FM works with product manufacturers to find a solution. For example, FM’s Solar Rakshak Plus, a long-range solar torch, was designed based on inputs from rural women.
Capacity optimization: By investing in Solar Sahelis’ long-term professional growth, FM helps her develop the skills she needs to understand her customers and meet their needs. FM offers a range of income-generating opportunities and helps her develop the skills she needs to fill these roles. Collecting data to inform the decisions of product manufacturers, for example, is one source of income she can access through FM.
FM’s Returns on Innovations
- Wealth Creation for Solar Sahelis
- Customer satisfaction rate: 79 percent of customers have referred FM products to at least four other people, 85 percent use FM’s products daily, and 30 percent purchase another product from FM within the year.
- Deep-market penetration: FM maintains a 30 percent market share in Rajasthan.
In Part 2, coming later this week or early next, Ajaita will discuss aspects of project risk management, her views on corporate social responsibility, and give some advice for female project managers.