Last week, I decided to quit my AIF Clinton Fellowship and open a cell phone store.
Well, not quite, but from the look of my desk at my host site, Frontier Markets, an onlooker might think that—there were hundreds of Samsung phones and Jio SIM cards stacked around me, and I was preparing them for wide-scale distribution across the state of Rajasthan. You see, I’m not starting a cell phone store, but I am supporting the organization in equipping its massive network of rural women with technology and an e-commerce platform to level up the efficiency and scale of their work.
For companies that dream of scaling their reach and impact—in and out of the social sector—digital technology holds many of the answers. A 2018 report out of McKinsey and Company stated that “the explosion in data, connectivity, and cheap processing power and storage means that industrial companies should be looking to technology-enabled transformations for their next horizon of performance and growth.” The paper goes on to put the monetary value of tech transformation for industrial companies at around $2 trillion. (Atluri, Rao, Sahni, 2018) For social enterprises like my Fellowship host organization Frontier Markets—aiming for both profitability and social impact—investing in tech means more efficient sales and data systems, greater customer reach, diversified product options via e-commerce, lower cost of customer acquisition: ingredients that add up to greater scalability and revenue.
But unlike an industrial company based in a major urban area, in India or abroad, Frontier Markets works in communities across India’s Last Mile—rural customers for whom the tech revolution is just starting. Technology is no small investment, and failure comes with a big price tag. And so I wondered—how should a social impact organization assess when and how to make the tech investment?
From my work at Frontier Markets—from the directions set by our visionary CEO/founder and former AIF Clinton Fellow, to the measured approach taken by our technology head, to the research I’ve been doing to roll out tech responsibly—I’ve identified three major strategic questions that must be answered with a “yes” before a social impact company should invest in tech.
- Is your target community ready? If your app runs on 4G, and there are no 4G towers in the villages you are serving, then you’ll be fighting a losing battle. If no one in your target community has used an app before, it is not impossible, but the job will be infinitely harder. There is a base level of readiness that must be present before the company starts doing any work.
- Does your service actually work offline? For a social impact organization looking to become tech “enabled,” the technology should be enabling something that they already know works. If the service is ineffective, technology will maybe streamline systems and data collection, but will be unlikely to solve the fundamental flaws in the impact model.
- Are you willing to invest in skilling and tech tools? Even if the baseline infrastructure exists in a community that makes tech possible (such as 4G access), there are almost certainly additional investments—from training, to cell phones, and more—that will significantly increase a community’s ability to adopt tech, and by extension, the organization’s likelihood of success. But if the organization has neither the money nor the willingness to make these investments, they will probably not be successful.
What does this look like in action? Frontier Markets is a good case study.
Is your target community ready?
Frontier Markets serves India’s last mile—and the truth is, the face of rural India is changing rapidly. Over the past few years, the rural customer in India has shifted from “a price conscious and conservative buyer to a value-seeking and brand sensitive customer” (“FMCG Companies”, 2019). A rapidly growing market, rural India is outpacing urban areas by 20%, with a projected consumption of $1.2 trillion by the year 2030. The average rural family today has 17K rupees annually to spend on discretionary purchases—on purchases beyond basic necessities. (Shah, 2019)
At the same time, the rural customer is getting more connected—internet usage in rural communities has surged in recent years, making up over 50% of India’s internet usage. (Shah, 2019) Between 2017 and 2018, rural India saw a 35% increase in internet users, with 97% of internet usage coming from phone usage. (Mathur, 2019) Although 4G connectivity has not fully penetrated rural India, India’s major telecom companies like Jio and Airtel have been investing in growing their networks to meet the demand. (Baburajan, 2018)
So Frontier Markets found itself in the middle of the perfect storm—a more engaged consumer base that is demanding more aspirational products at a time when their communities are getting more digitally connected. They identified that this was the right moment to enter the e-commerce space.
Does your service actually work offline?
Before writing a single line of code, Frontier Markets had built a functional and effective offline commerce infrastructure. For years, Frontier Markets’ women entrepreneurs have been able to accept orders from customers in remote, Last Mile villages, process payment, and get the product delivered to their door within 1-2 days. And all of this happened without an e-commerce platform. But when Frontier Markets read the signals that their community was putting out—that customers in the last mile were ready for e-commerce—they launched an intensive and intentional process to take the working offline processes and digitize them.
But to do this, they did not simply mechanize systems; they took a human centered design approach, bringing in some of their Saral Jeevan Sahelis, the women entrepreneurs that Frontier Markets recruits and trains as their front lines sales/fulfillment staff, and running design sessions with their designers and developers. This way, they could build an app that captured the required functionality in a form that their users would enjoy.
They had systems that worked offline, with a network of users that worked offline—so a tech investment was simply a way to make these existing assets work more effectively and efficiently. In short, Tech could be an enabler of value, not the value itself.
Are you willing to invest in skilling and tech tools?
Even with many of the right conditions in place, Frontier Markets acknowledged that tech adoption for last mile customers was not as simple as “if you build it, they will come.” In truth, we face major barriers to usage—from low digital literacy, to low smartphone ownership (often, one member of the family will have a phone, but this is insufficient if we want our Sahelis to use tech to run their business).
To overcome these barriers, we’ve built a train the trainer model, where we’ve converted a dozen of our most tech-savvy women into full-time field-based tech support (Saheli Tech Champions). They are responsible for training and support women as they get onboarded to using technology to do their work—and can help them navigate the anxieties associated with tech adoption.
Beyond our field staff, we also have a call center at our Head Office, with dedicated staff to provide support. From troubleshooting to accountability, Frontier Markets has invested in making sure that the tech implementation does not simply happen by chance.
But of course the most significant investment has been in the hardware itself. My desk transformed into a cell phone store because we wanted to guarantee that if we wanted our women to use technology to do their jobs, they actually had the right tools in hand to make it happen.
In conclusion, it can be easy for a social impact organization get swept up in the appeal of going digital; after all, if done right, it can open up the scale of impact that many of us dream about. But if done too rashly—without making sure the community is ready, making sure your model works, and making sure you’re willing to make the financial and time investments to actually make it successful—it is possible to end up with an expensive piece of technology that does not actually work for its would-be users. As for me, I can’t wait to be part of how this unfolds at Frontier Markets, and to continue to learn how to bring tech to the last mile responsibly.
Baburajan, K. (2018, October 8). “Most of Rural India yet to Experience 4G Data Services.” Retrieved November 7, 2019, from https://www.telecomlead.com/4g-lte/most-of-rural-india-yet-to-experience-4g-data-services-86750.
The Hindu Business Line. (2019, February 19). “FMCG Companies Should Recognise the ‘New Rural India’ to Stay Relevant: Study.” Retrieved November 7, 2019, from https://www.thehindubusinessline.com/economy/fmcg-companies-should-recognise-the-new-rural-india-to-stay-relevant-study/article26313814.ece.
Mathur, N. (2019, March 11). “India’s Internet Base Crosses 500 Million Mark, Driven by Rural India.” Retrieved November 7, 2019, from https://www.livemint.com/industry/telecom/internet-users-exceed-500-million-rural-india-driving-growth-report-1552300847307.html.
Shah, A (2019, July 10). Frontier Markets Investor Presentation [Power Point Slides].
Venkat, A., Rao, S., & Sahni, S. (2018). The Trillion-dollar Opportunity for the Industrial Sector: How to Extract Full Value from Technology. McKinsey and Company. Retrieved from https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/McKinsey%20Digital/Our%20Insights/Tech%20enabled%20transformation/Tech-enabled-transformation-The-trillion-dollar-opportunity-for-industrials.ashx.