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Business Opportunity in the Toilet: Partnering to Flush it Out

Imagine this: You manage a successful company that distributes Portable Toilet Cabins (PTC) in India.  You see 24% of India’s urban population living in slums with very limited access to formal toilets, 50% of India’s population still defecating in the open, and around 6,000 children dying each day from diseases related to poor sanitation, such as diarrhoea. 

 

You see the makings of a strong demand: a need to be met and a large untapped consumer base.  You have the supply (the PTC) and you know that a “pay-per-use” financing model could keep costs to the customer low while generating profit after a slightly elongated break-even period. You’re a business man and you’re attracted to the viability of this model.  This market promises to give your PTC more exposure than any of your other markets yet. 

 

Now imagine this: You live in a crowded urban slum in New Delhi with few assets and even less disposable income.  Life isn’t comfortable, but you have your systems.  A man, clearly not from the slum, approaches you one day offering you access to a newly installed PTC for a small pay-per-use fee.  Ha, you think. This man wants me to pay for something I already do for free.  Does he think I’m a fool? 

 

Herein lies the challenge faced by many a business when entering base of the pyramid (BoP) markets.  Different conceptions of “need,” distrust of outsiders, and all the other challenges associated with operating a formal economy business in an informal market too often create insurmountable roadblocks.  At this point, many businesses are faced with the question: Do we turn the car around and head for another market, or do we get out of the car and figure out how to clear or bypass this roadblock? 

 

For those that choose the latter option, collaborating with unconventional partners may prove essential. These “partnerships” may not simply provide a one-stop, bulldozer solution, but rather may provide the tools and resources to find innovative solutions.  Standing outside the car at our road block, a business may be wise to approach nearby villagers with their shovels and local maps of the area.

 

This is precisely the approach the PTC business in our original scenario eventually took.  They understood that they needed to work with local actors that both understood the importance of sanitation and were respected in the community.  By sharing ownership of the project and revenue, the company could rely on the local partners to dedicate time and energy to changing attitudes and behaviours on the ground and the local partners could rely on the company to provide training and support. 

 

It was through this partnership—one with a clear sense of mutual benefit—that the company was able to bypass the roadblocks and expand their core business into markets inaccessible to others in their industry.  Simply good business.

 

For more information on using partnering as a tool to overcome Inclusive Business challenges, please contact me at Jessica.Scholl@iblf.org.

 

For more information about partnering in general, visit: http://thepartneringinitiative.org and http://www.iblf.org.

 


Views: 164

Tags: Partnerships, Water, sanitation and waste management

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Comment by Asif Mahbub Karim on November 5, 2011 at 0:07
Great idea and interesting one indeed !! Partnering is essential everywhere.
Comment by Jessica Scholl on November 4, 2011 at 18:31
Thanks for your comments, Parveen and Georgina!
Comment by Parveen Sultana Huda on November 4, 2011 at 15:58
Very interesting idea! Changing behaviour is one of the most critical yet most neglected areas of business as Product Development people focus on utility rather than acceptance. I think Business Development people should really understand BoP Consumer behaviour before they even pick up their pencils to start product design or re-desing. Soon we might be helping such a project - which clearly requires this support and we will be sure to look you up then!
Comment by Georgina Turner on November 4, 2011 at 14:36
I quite agree Jessica. PSI (Population Services International) faced the same issue. How do you get people to wash their hands or clean their water when they can just not bother for free? Although not a private company they used a commercial solution - a network of distributors who could advocate the cause whilst making an additional income at the same time. Essential in this case was education and evidence that cleaning hands and water gives less child illnesses. As you say, building trust and using the right link to the BoP is essential for success!!
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