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| Bottom-of-the-pyramid customers are 'the most ruthless on the face of this Earth' says cleantech entrepreneur Ajaita Shah |
In sun-drenched Rejasthan, Ajaita Shah is working to change that. Through Frontier Markets, a social enterprise she co-founded back in 2011, the 29-year-old cleantech entrepreneur is looking to provide solar powered lighting solutions to some of the state's poorest citizens.
"Clean energy is the base foundation that's required before you can drive any other services," says Shah. And the reward for the consumer is immediate, she adds. "If you can provide light where there's no light, or power where there's no power, people are instantly satisfied."
Photovoltaics aren't new to India. Where Shah differs is in her focus on the poorest segment of the market. Most solar manufacturers in India lack the capacity and knowledge to access this hard-to-reach sector, she says, "No retailer or distributor today really knows their customers."
Yet the sheer size of India's low-income consumers - the total number of BoP households is estimated at 114 million - defied generalisations.Shah might know who her low-income customers are and what energy needs they have, but the knotty question of how to physically get suitable products to them still exists. Frontier Markets opts to work with existing small retailers in its target communities, providing shop-owners with its products on credit. "Essentially, we started converting existing bricks-and-mortar stores into solar shops," Shah says. Where her start-up really breaks the mould is in its offer of after-care service.
She challenges the general notion that those at the bottom of the pyramid lack spending power, however. "they have money," she insists. "But they're the most ruthless consumers on the face of this Earth because there's an opportunity cost of where that money goes."
The key is creating a willingness to pay, she continues. To that end, Frontier Markets recently partnered with the International Finance Corporation on an awareness campaign about the benefits of solar energy. The publicity blitz forms part of IFC's Light Asia initiative, which aims to bring lighting to 400 million Indians living off grid. It's an ambitious goal. And one that will only be reached one'last-mile' at a time.
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