NEW DEHLI, India — There are currently 32,000 villages in India without power, and those that are on the grid still experience frequent power outages. In 2011, entrepreneur Ajaita Shah decided to counter this issue and co-founded Frontier Markets, a social enterprise that brings solar-powered light to some of India’s poorest citizens.
Solar power has been utilized before in India, but Shah is reaching out to a new group in the market: the “base of the pyramid.” Most Indian companies that supply solar-powered technologies overlook this poor division of people because they are notably difficult to reach and access. As Shah says, no other retailer or distributor “really knows their customers…just dumping their products in the market.”
Shah believes that Frontier Markets is making a difference in India’s low-income market. After graduating from school in the United States, she moved to India to work in the microfinance industry and has lived in a variety of different places: Jharkhand, Orissa, Bihar, Andhra, and Karnataka. Shah has an advantage in serving the “base of the pyramid” because she has firsthand experience dealing with the poor in India. For her work with Frontier Markets, Shah was recognized on Forbes’ 2014 30 Under 30: Social Entrepreneurs List.
India has a huge low-income population. The estimated number of households at the “base of the pyramid” is 114 million. To cater to such a large consumer group, Frontier Markets performs extensive research and surveying. “If they have five rupees, what would be the first thing they’d spend it on?” Shah maintains that she has been “trying to find out how villagers think and what they prefer.” In order to serve them in the best possible way, Shah must first understand them.
However, she also has to physically deliver the solar power to them. Traditionally, companies use a door-to-door method to convince people to buy the product. Frontier Markets instead partners with small retailers in the communities. Shah has trained the locals to sell the solar energy products to deserving households at the “base of the pyramid.” Through this innovative framework, Frontier Markets has transformed 125 local people into entrepreneurs so far. Most significantly, Shah has set up six customer service centers for Frontier Markets. Each service center covers around 300 Indian villages.
“After-sales service is so important because you need to be accountable for what you’ve sold,” Shah said.
Frontier Markets currently operates in 16 districts in Rajasthan. Shah’s solar power comes in the form of affordable lanterns and torches. For solar solutions that are more expensive (such as home lighting systems), Shah hopes to offer loans through a nonprofit or microfinance partner with low interests in the near future.
The “base of the pyramid” has little money but makes up some of the “most ruthless consumers on the face of this Earth.” Recently, Frontier Markets has partnered with the International Finance Corporation to create a readiness to pay and raise awareness of solar energy. With more social enterprises like Frontier Markets, a larger percentage of Indian people at the “base of the pyramid” could begin to enjoy the amenities of solar power.
– Kristy Liao
Sources: Arc Finance, Forbes, The Guardian
Photo: Decoller VitC