Changing How Rural India Shops
Supply Chain Management plays a key role in the economy of any country. This contributes to improving the relationship with customers, suppliers, income generation, and most importantly, the availability of products in the remotest of places. But, there are many challenges that a country like ours is highly susceptible to because of its vastness and diversity.
We interviewed Ms. Ajaita Shah — CEO of Frontier Markets, one of our cohort companies in Supply Chain Labs, to have a closer look at how her enterprise, which focuses on rural India, is carving a new path for rural outreach with innovative supply chain management via assisted e-commerce.
She has vast experience in this particular field and she has been constantly working with social enterprises, microfinance, rural distribution and marketing to ensure that companies get a never-before rural inlet; while also empowering rural women.
Here are the notable key points taken from the interview:
Frontier Markets: Their Role and Responsibility in Supply Chain
Frontier Markets, essentially, are the suppliers to rural customers. What they do is bridge the gap between access and help brands to reach rural customers and remote villages, especially rural women. The entire model is based on assisted commerce that is fully run by women entrepreneurs known as Sahelis.
Shah says, “We essentially work with three critical things:
- One, generating demand for products and services — helping rural customers actually know what the products are and what the services are.
- Second, we do physical fulfilment. We take the products and deliver them to the doorstep of where the actual customer lives.
- And third, we’re collecting data to help companies understand better details and insights about rural customers.
We do this through a physical and a digital platform. Our supply chain essentially is a group of rural women who we invest in and who are connecting us to the customer.”
Challenges faced by Companies: How can they overcome them?
Well, it is because of the massive market demand. In the last couple of years, rural customers are growing rapidly. They have access to the Internet, improved infrastructure, the desire to actually buy white goods and products and the money to make it happen. Almost a 2.2 trillion rupee market is untapped today.
“The reason why it’s not tapped is not because of demand, but it’s actually product and service companies’ lack of efficiency to reach this customer base. This rural customer is one hundred million households or seven hundred million people, but they’re scattered in seven hundred thousand villages,” says Ajaita.
Another challenge is digital disconnection. E-commerce platforms today have no outreach to the digitally-challenged rural customers.
Bridging the Gap!
Frontier Markets has designed its model in such a way that it’ll be helpful to connect to rural customers, who actually want genuine products and services. Frontier Markets partnered with companies like Samsung, Philips, Crompton, Bajaj, as well as even social enterprises that are coming up with innovative solutions. This assistance between the companies and the people helps the total ecosystem to work fluidly.
Rural customers get the confidence to buy online and the companies get better access through know-how. So, the companies can essentially bridge the gap between rural customers and their infrastructure limitations. They can continue their services even if they don’t have any sort of infrastructure present in that particular place.
Tech won’t solve all approaches!
This is one unique way to handle the customers in a rural scenario with Sahelis.
According to Ajaita, this market has a customer base of half a million households and Frontier Markets has a network of 10000 Sahelis. They are the women entrepreneurs who are best at getting customer insights because they go into the hearts and minds of where the rural customer lives. Every data point is looked at with exclusivity. This data point can inform product companies about the actual demand for the product and then deliver the products.
What makes this system really unique in terms of services is that consumers can directly communicate about not what they want to buy but what they actually need on this platform. The model has been designed to look at the rural customer as a lifetime value solution. So, the customers trust their Sahelis in a way that they will intentionally buy everything from them, forever.
The rural market is not always a tech-centric market. Tech won’t solve all. Consumers here are more inclined towards a trusted face with a digital look — assistance is a significant factor here.
The vision of Frontier Markets
Ajaita, with her experience of 17 years, informs us that they do have some strong visions in place. They do value their rural customers, especially the rural women.
They believe that a woman is the most trustworthy, opportunistic service provider in the village. She can go into any house; she can have any conversation. Thus, she can become a very valuable asset in the entire system.
They also believe in a shared value principle. Like all the stakeholders in this system, from the suppliers, the field staff, the Sahelis and finally, the consumers — should all have an economic impact. Any product or service that they introduce, ensures that they track whether their rural customer is able to save money, make money or have a better life. That’s a very strong philosophy that they’ve always built on.
The Impact on Growth in the Rural Scenario in this Pandemic
Everything revolves around social commerce today. E-Commerce is based on online social data, that is curated from specific data points along the way. Frontier Markets has taken this concept and customised it in their own way and have modified the supply chain according to the demands of the rural consumers.
So, the influencers here are the Sahelis and they have strategic tools to assist the rural consumer, collect data points and help product companies assess the demand. It is a hybrid solution for social commerce — ideal for rural India.
“We understood our value very differently last year when the pandemic started; we realized that as a rural access company, our role in the ecosystem was going to be more critical than ever on a job creation perspective, on an essential delivery’s perspective, supply chain perspective, scale perspective and insights perspective. That’s really what encouraged us to grow. Even though the pandemic would have told most companies to slow down, we actually ramped up in a very significant way.
When it comes to pandemic response, we’re critically positioned to continuously help protect the rural customers. So, we’re looking forward to enabling jobs. We’re looking forward to continuing to bridge that essential delivery gap. Now, we will also play a significant role when it comes to health care and get involved in health education, insurance deliveries; Covid crisis response.”
The creativity and the tailor-made strategies make this women-led platform — Frontier Markets, one of the most robust end-to-end commerce platforms that provide products and services delivered at consumers’ doorsteps in villages and helps brands fulfil and curate their products in a marketplace easily.