Having a great solution is all very well but it’s simply no use if you can’t get it to the person who needs it. The challenge, as any social entrepreneur will tell you, is that whilst the right technology might be available to solve a problem, the poorest people remain disconnected from retail markets and have a low power to spend. The distribution channels simply don’t exist to get products across the so-called “last mile” – creating an issue of both access and affordability.
A recent article by Diana Jue (of the MIT’s Department of Urban Studies and Planning) in the Stanford Social Innovation Review records four innovative ways in which social enterprises in India are trying to bridge the “last mile” to create a more efficient market for clean cookstoves.
One option is to team up with NGOs and Microfinance Institutions to take advantage of a pre-existing network of relationships. First Energy reaches out to small local NGOs while Envirofit leverages the distribution system of MFIs. The bundling of the stove with other financial products also enables the MFI channels to subsidize the cost of the stoves.
Second, working with rural dealers whose network markets, sells and distributes products. Oorja, for instance, uses Adharam Energy which deploys female village-level entrepreneurs and members of self-help groups who give live demonstrations and identify prospects as well as Villgro Stores which operates village shops.
Third, riding on the existing rural networks of other companies. For example, Prakti Designs is promoting its stoves through SELCO which sells home lighting systems.
Finally, companies such as Envirofit have realized that a good solution lies in the traditional rural trade networks with its established chain of distributors and retailers. Combining store presence with mass media advertising, Envirofit reaches out to a demographic cluster that makes its purchases from these stores.
The common factor seems to be the growing realization that to create a well-functioning market, integrating products such as cookstoves into existing market systems is extremely important. Creating a distribution network of their own is neither feasible nor viable but using existing channels at least ensures a pipeline that may not be perfect but can at least be adapted to reach the last mile.
Photo courtesy: Envirofit
Read the full article on: Innovations That Address the Last-Mile Distribution Challenge
