Bringing E-commerce to the Unconnected 3.3 Billion People
I recently visit Bangladesh and I had the opportunity to visit remote villages and explore how rural dwellers are utilizing technology if anything at all. I wrote this post about my findings, but to my surprise, even the people who had no smartphones, electric grid or data connectivity were finding ways to get offline content and play games — regardless of the limiting constraints. Right now, 65% or 104 million people in Bangladesh are rural dwellers and the country has a unique mobile subscriber market penetration at 53% and growing.
Therefore, I’m convinced that marketplaces and e-commerce platforms will be key enablers for expanding the digital economy to most people who are not yet connected. And offer a huge untapped economic opportunity for anyone involved. This via the means of bringing marketplaces to village dwellers, and low-income citizens. Marketplaces have the intrinsic features— when well design — of empowering users. And consequently has the potential to alleviating poverty and empowering communities through services, products, and entrepreneurship. Alibaba is already making impressive progress with Tabao Villages and rural service centers, thus far is growing with more than 2000 centers. Yet, these centers do not offer many community services and cannot deliver or reach a remote village.
A creative hybrid and multi-stakeholder approach is required to solve this problem. In Dhaka I had the chance to meet with a social enterprise called iSocial, and they have a very interesting solution for this problem.
Infoladies 2.0 — Save the Day
ISocial is the brainchild of Dnet who is responsible for coining the concept of Infolady or Kollyani in Bengali. Infoladies are women between the age of 18 and 35 crisscrossing rural areas in Bangladesh on a bike, armed with a tablet, smartphone, dongle, carrying equipment able to take and send test results to medical clinics, offering prenatal checks, and a variety of other services and products.
These women come from lower-income or poor families in rural areas, with up to 12 years of schooling and limited job opportunities. ISocial trains and recruits these women with the purpose of acquiring all the necessary knowledge to work, and serve rural communities. Infoladies are encouraged to become independent business owners or entrepreneurs. Therefore, a key requirement is for them to invest their own money, with the option of a bank loan to finance their training courses and equipment.
An important thing to note is that these infoladies are not just sales representatives roaming around villages selling smartphones and credit top-ups, but they are genuine community service providers. They are also trained to give information about seeds, new methods of agriculture, and healthcare — like hygiene or preventing sexually transmitted diseases and childbirth.
This scheme is not charity. But rather, infoladies charge a small fee for each service they offer. This allows them to earn an income and invest back into their own business.
Infoladies — The Backbone for the E-commerce Platform Innovation
The delivery of goods and services to rural dwellers is a big challenge. These villages don’t have product distribution centers or fast track delivery supply chains, Thus, making the process slow, and hard to service and manage. Therefore, iSocial is solving this problem by partnering with local brands and combining an e-commerce site, a call center, local hub managers and infoladies together into a single platform. The interesting innovation here comes by combining product supply chains with the social community services that infoladies can provide.
ISocial e-commerce platform is in beta stage at the moment, and will mainly service women and offer products like mobile phones, top up credit, sanitary napkins, coconut oil, seeds, pens and much more. But another area of innovation will be to bring important health, education, agricultural services to these communities, and gather important non existing user data through the e-commerce platform.
A lot of the people in rural areas don’t own a smartphone or have internet connectivity to enter an e-commerce site. ISocial solves this problem by giving the option to call their call-center or alternatively place product orders through infoladies. Once the order is placed and activated the infoladies will be in charge of delivering the products to the villages — making it accessible to anyone, and with a better price than buying at a local village store.
Now, this model will be economically sustainable because everyone involved in the supply chain will get a profit. The iSocial e-commerce model creates a network of women entrepreneurs, brings key health, educational and agricultural services and creating revenue. Consequently, making it more enticing for various local and international players to get involved including governments.
Replicating this E-commerce Model to Other Emerging Markets
Alibaba in China has made tremendous progress towards bringing e-commerce to rural areas thought Tabao Village and rural service centers. According to their sources, they have reached 16,000 villages in 29 provinces, and 1,803 centers. And more growth is expected considering 590 million people in China still live in rural areas. Yet, the drawback of this model is that it’s more centralized compared to the distributed Infolady network. The beauty of the infolady model is the strong social good component targeting UN SDG’s — SDG-3 (Good Health and Well-being), SDG-5 (Gender Equality), and SDG-8 (Decent Work and Economic Growth).
Now, replicating and scaling up the infolady model in other emerging markets will be challenging. It will require a high first investment and the participation of several key partners to make the supply chain work and run effectively. As profit margins could be low in the first months of operation. Yet, Haiti is in the works of deploying the infolady model successfully. The model has strong potential because other emerging markets need a working technological solution for low-income citizens. And most projects are still in very early stages except MPesa in East Africa. Traditional social government policies are not fast enough to cope with the huge technological change and the impact it will have in their labor markets.
ISocial is planning on deploying 1000 infoladies in the field in Bangladesh and planning on increasing this number to 10,000 by 2021. They are also in conversations with local brands, setting up the call center and beta testing the e-commerce web app. ISocial expects to deploy the full working e-commerce model in the next few months in Bangladesh.
The Future for E-Commerce
After visiting many low-income communities, learning and gathering all this information. The rise of technology in emerging markets and the impact for the low-income population is something that requires paying attention. High tech like AI, 3D printing, robots, smart IOT networks and automation will disrupt the labor force all around the world taking millions of jobs for the low-income and unskilled people. Emerging markets are at a pivotal turning point now. Therefore, initiating discussions and bringing together different stakeholders, and activating initiatives is of paramount importance. It’s a matter of global security for the well-being of humankind. I strongly believe in open marketplaces like e-commerce to be a powerful tool for activating the 3.3 billion unconnected population, and to make them participants and contributors to the global digital economy. Disintermediation playing a key factor in the exchange of goods and services. And as a consequence bringing new opportunities for wealth creation, health, agricultural, and educational services — especially for women and children.
Open marketplaces provide opportunities to create sustainable business models for everyone involved, considering that most of the earnings of around 50% of the major corporations listed at S&P 500 will come from emerging markets. Mobile penetration is happening fast for the low-income population at large in emerging markets.
Gathering data on how technology will disrupt all sectors of the population — including middle and low income-classes — in emerging markets will be a key priority to make it all work. Technology is non-deterministic, and we can shape the future and use it as a powerful force to solve one of the most entrenched human problems — income distribution inequality, and social class divisions. ISocial is doing very interesting work in this direction and we want to amplify its reach by connecting them with other potential partners in other emerging markets around the planet.