Lots of technologies that didn’t exist a few years ago now seem indispensable, especially in the developing world. LED lights help children study in the evening hours, better cooking stoves don’t pollute the indoor environment, and water filters make water safe. Those products are on the market, but they often don’t reach the people who need them--and even if they do, they may get thrown out if they need repair.
At the same time, millions of small, family-owned local retail shops in low-income areas around the world sell fast-moving consumable goods, such as soaps and candy. But you can’t find essential technologies at these retail stores because the local shops don’t know about them, how to get them, or how to service them.
Those are the problems addressed by Essmart Global, founded by Diana Jue and Jackie Stenson. The company won the grand prize in Dell’s Social Innovation Competition this month. “Without a solid distribution channel, those essential technologies don’t go very far,” says Stenson. “Distribution is not something that people wanted to improve in the past, but we both find it exciting.”
The company is starting to work in India, where they did a pilot project in January and will be starting up full-time operations in August. Instead of focusing on really rural areas, they are starting to distribute products on the outskirts of cities. They choose products--say, LED lights or water filters--that are cheap enough to be purchased but still an investment, costing between $10 and $30. Then they demonstrate the products to local shop owners, and work out an arrangement with schoolteachers and local children to spread the word about the technologies.
They choose things that have a warranty, and educate the shop owners on how to get parts or send products away for repair. Both of the co-founders have experience in MIT’s D-Lab, designing technologies to improve the lives of people around the world. “We’re using a for-profit model, which has greater impact on people’s ability to fix things when they purchase things,” says Stenson.
From there, the team sets up a somewhat-traditional hub and spoke distribution network, with a few tweaks, like virtual inventory for the shops. Essmart incentivizes shop owners to stock their catalog and demonstration products. Deliveries are made on a scheduled basis, or shop owners can pick up technologies at Essmart’s warehouse.
The team says India is an ideal place to start because of the huge population, and the fact that many of the products they endorse are available there, but are not widely distributed. After India, they say they can go elsewhere, leveraging the existing retail-shop network around the world, with products tailored to specific regions.
Along the way, the company is making a pitch for improving the system--not just the technologies, according to co-founder Jue. “Right now, the rewards are for product innovation, not process innovation. We want to bring the distribution challenge into the spotlight.”