Every day in India, over 500 million people practice open defecation that could lead to adverse health implications such as diarrhoea, anaemia and stunted growth, especially amongst women and children. Apart from being a health hazard, absence of toilets means that millions of girls drop out of school, get limited education and face harassment. To address this national concern the Government of India, in 2014, launched the Swachh Bharat Abhiyaan (Clean India Mission) that increased the country’s sanitation coverage from 39 per cent to 65 per cent by 2017. Despite considerable efforts towards improving sanitation coverage through government initiatives, we still have a long way to go before achieving universal sanitation coverage by 2019. Considered to be one of the most under-developed states in India, Odisha is among the worst performing states in terms of sanitation coverage, with 40 per cent of residents living without access to toilets.
Svadha, an Odisha-based sanitation ecosystem aggregator, was awarded a GSMA Mobile for Development Utilities Innovation Fund grant in 2017. Here’s the latest from the field on how it’s all going:
Svadha is building an e-commerce platform to address the fragmented sanitation value chain between product manufacturers and entrepreneurs who sell sanitation products.
Though their grant, Svadha has developed the ‘SaniMark’ platform, a mobile application that offers affordable, quality sanitation products for ‘micro-entrepreneurs’ – small-scale shopkeepers selling sanitation products like toilet bowls, pipes, basins, bathroom fittings etc. Svadha aims at reaching the ‘last mile’ by simplifying the procurement, management and sale of sanitation products for the micro-entrepreneurs’ in rural Odisha, so they can better serve end-users.
The SaniMark application, offered free of charge, has two key features for the micro-entrepreneur; (1) online shopping for sanitation products/services and (2) management of inventory and basic financials. Svadha also offers its micro-entrepreneurs initial training to help use a smartphone app for procurement and after sales support to their consumers with toilet insurance and optional cleaning services. Svadha currently has 300 micro-entrepreneurs on its network (number of people who have downloaded the app) and aims to reach 3000 entrepreneurs by the end of 2018.
The business model
Svadha buys sanitation products from manufacturers which they in turn offer on their e-commerce platform. Micro-entrepreneurs can choose from a variety products and place orders through the application. Svadha then delivers the products and accepts payments by credit/ debit cards, cash or cheque. Svadha has also incorporated post-sales services into its products such as insurance, repair and cleaning. Svadha makes 5 to 10 per cent margin on each product sold that is paid for by the equipment manufacturer.
Learnings from the field visit:
- Access to Mobile Devices – despite a strong willingness to pay, entrepreneurs have limited access to affordable business-friendly devices such as tablets and laptops. Micro-entrepreneurs are currently using the Svadha app on their smartphones which is not ideal as it limits usage to a single user on a personal device and can also be cumbersome for managing accounts. They offered a simple suggestion of either adding a lease-to-own scheme for devices with the app or allow the app to be accessed through multiple devices (mobile phone and laptop) at once.
- Capacity Building – entrepreneurs in rural areas require initial skill support to use the application and navigate through all of its features. To address this, Svadha has appointed a few local ‘Sales Agents’ across its geographies, to provide real-time support to first time users.
- Focus on app usage vs downloads – Svadha has made great progress since launching the SaniMark app, with 300 micro-entrepreneurs currently registered on the platform. 60 per cent of these micro-entrepreneurs are classified as active users. Having established a sound customer base, they are now working on increasing ‘app usage’ versus getting more downloads as the true value of the solution will be realised only through increased business/ transactions through the app. Some of the incentives include offering seasonal discounts, conducting village level marketing, incorporating feedback on the app from micro-entrepreneurs for improvements and training micro-entrepreneurs on alternate payment methods. Svadha also plans on launching a state-wide marketing campaign in the next few months to spread the word and build a brand amongst micro-entrepreneurs.
- Beyond a B2B service – Svadha started with the development of an app for entrepreneurs but soon realised that a B2B app would be incomplete without linkages to the wider sanitation ecosystem. They are now working on developing a customer-facing app that allows customers to identify their local sanitation micro-entrepreneur while also providing access to masons and plumbers for installation and after-sales support.
- Potential partnerships with mobile network operators (MNOs) – While Svadha hasn’t (yet) explored partnerships with MNOs as part of the grant project, there are some clear synergies that could be explored in the future:
- Partnership for a ‘lease-to-own’ device program for the micro- entrepreneur network;
- Getting MNOs to develop a ‘special data pack’ for micro- entrepreneurs to encourage uptake of the SaniMark platform; and
- Leveraging the micro-entrepreneur sanitation shops as point of sale (POS) for MNO products such as SIM cards and airtime credit. MNOs could also push their brand and offers through the sanitation shops.
- Pushing digital payments – cash still remains the preferred method of payment by microentrepreneurs on the Svadha network. This is largely driven by cultural preferences and payment habits and has little to do with access to financial services as most micro-entrepreneurs have a formal bank account (78 per cent of the adult population in Odisha is banked). To improve their cash management and reduce the risk associated with large cash payments, Svadha is encouraging customers to use digital payment methods such as mobile wallets, digital wallets or internet banking by offering these payment options on the SaniMark app in the near future.
Despite initial roadblocks, Svadha has built a robust platform that addresses the pain-points of micro-entrepreneurs through an active feedback-seeking mechanism and strong local community presence. Scaling this innovation will rely on the ability to build strong partnerships that can replicate the Svadha solution in various markets. By 2020, Svadha aims to expand to other states in India and explore partnerships in international markets so as to create a global virtual sanitation platform.
In the words of Mr. Krishna Mishra, founder of Svadha, “The vision is to create a sustainable and responsible sanitation ecosystem built relying on information technology that empowers sanitation micro-entrepreneurs to provide quality goods and services and to end-users.”
This initiative is currently funded by the UK Department for International Development (DFID), the Scaling Off-Grid Energy Grand Challenge for Development and
supported by the GSMA and its members.