By Peyton Fleming/SEforALL
Ajaita Shah talks at laser-fast clip, eager to get to her next thought. Her Indian solar company, Frontier Markets (FM), is moving even faster, eager to capitalize on one of the most untapped and challenging markets in the world.
With solar costs plummeting and solar startups popping up everywhere, Shah’s six-year-old enterprise stands apart. In addition to being profitable (a rarity among solar startups in emerging markets), the company has an bold plan for transforming India’s vast rural areas, where hundreds of millions live with unreliable electricity or no power at all.
Shah’s market is the so-called ‘last mile,’ remote areas last in line for being connected to electric grids. She wants to blanket households in these frontiers with solar-powered appliances for nearly every need imaginable – from sewing machines and water purifiers, to energy-efficient refrigerators and simple solar lamps.
Through an extensive sales network, comprised of farmers and women known as Solar Sahelis (“Friends of Solar”), the company’s products have already reached more than 1.7 million people in the northern state of Rajasthan. Her plan now is to expand to another half-dozen states – all in the next three years.
“It’s exciting and it’s scary,” said Shah, a New York City native whose company has dozens of products, 3,000 sales people and made a small profit for the first time this past spring. “We have a 2020 vision of creating a network of 24,000 micro-entrepreneurs (selling our products), of which 50 percent will be women.”
Her business strategy evolves around two core principles – “customer is king” and the power of women, both as customers and sellers.
Shah says it’s increasingly clear that lower-cost solar technologies are ready for prime time in India; the challenge is building a business model with the necessary sales networks, service support and products offerings suited for India’s diverse rural populations.
Understanding her customers is critical, she says, and it explains why Frontier Markets offers two-dozen solar lighting products ranging from simple solar torches to large rooftop systems. “It’s not just what kind of light and when they want it to come on,” she said. “It’s also price points, the type of warranty, when should we sell the product and why, can they pay cash, can they pay 10 percent a month.”
In terms of timing, for example, she knows never to sell solar lighting systems with fans in December when it’s cold; and always sell solar powered water purifiers during the rainy monsoon season when water contamination problems increase.
Another lesson she’s learned is selling products that are “productive,” which explains why she’s been careful about selling TVs. She plans to sell them, but only to customers who can easily afford them. “If the product isn’t linked to productivity, there are more reasons why customers can default,” she said.
Sewing machines are a different story: Many rural Indian women are skilled at sewing, but their productivity is limited because they use using foot-pedal sewing machines. Frontier Markets recently began manufacturing hybrid solar-powered sewing machines that will boost productivity as much as 10-fold. Shah figures that buyers will be able to pay off the $1,000 piece of equipment in the first year.
Robust and vibrant sales networks are also critical, and much of Shah’s inspiration on this comes from Sears & Roebuck, the iconic US consumer goods retailer that put a premium on after-sales service and door-to-door sales.
She also draws wisdom from US cosmetics giant Mary Kay, which is premised on women selling to women. Shah already has 1,000 Solar Sahelis going door-to-door in villages across Rajasthan and she plans to boost that number to 12,000 in the next three years.
Her logic is simple: “We think we can convert households faster using women,” Shah said, noting that women are the biggest users of FM products and are also more receptive to trying out new appliances than men. “When you’re working with behavior change products as we are, you want to connect with the person in the house who is most empathetic to the behavior change – and that’s women,” she said.
Shah’s women-oriented focus is not entirely unique in the energy sector. Similar green energy enterprises are popping up all over the world, including Solar Sister, an African nonprofit which has 2,500 women entrepreneurs selling solar lamps, mobile phone chargers and clean fuel-saving stoves in Nigeria, Tanzania and Uganda.
Shah joined Solar Sister, ENERGIA and several-dozen other gender diversity and energy access experts in July at Sustainable Energy for All’s kickoff meeting of its People-Centered Accelerator in Iceland. The effort aims to promote gender equality, social inclusion and women’s empowerment in the energy sector.
“The concept is phenomenal, it’s really needed,” said Shah, who is especially interested in information sharing and possible long-term collaborations with Solar Sister. “Nobody has ever linked gender inclusion to energy access as a way to achieve more scale (in accelerating energy access progress). They’re so clearly linked in my mind.”
Peyton Fleming is the lead writer at Sustainable Energy for All