Returning from a long hiatus, I found notes for this blog post languishing, waiting to be written. What I call the “globalization paradox” is actually an observation on the ubiquity of global brands and culture in remote regions. I’ve been surprised throughout my travels by the level of penetration by certain branded products (e.g., Coca Cola, Pepsi, Frito Lays) or pop culture in seemingly isolated areas where other signs of development and plugging into the mainstream switchboard are rare. Despite the fact these areas are apart from the interconnected world, the exposure to globalized products and media is extremely high.

Anecdote #1:

On a minibus ride through northern Lebanon last year, I met a young architecture student of the University of Tripoli. He spoke no English and only fragmented French, but when he passed me his mp3 player for a listen, I was surprised to hear Akon, One Republic, and other American artists. It was surreal – he had all the latest hits. I offered to send him music recommendations via email, but was once again surprised to hear that he had no email account. He candidly told me, “my sister has a hotmail account, but my friends are in Tripoli or in my village so why do I need email to contact them?” I was bewildered. Here was someone who was voluntarily isolated from the external world and yet was an avid follower of American pop music, in a language that he didn’t even speak. How does one explain this pop culture phenomenon?

Anecdote #2:

A couple months back, I visited a few tribal villages in Jharkhand, who intentionally limit their contact with mainstream society. These villages mostly subsist on sustainable farming with a little income from government rural employment programs. On average, these families earned 40 – 100 rupees per day; most of them didn’t leave the village aside from occasional trips to the market in larger towns. Yet, in the center of each village, a small Airtel PCO sign would hang outside a doorway announcing cell phone recharge station and the existence of the kirana shop selling all the familiar branded goods from bottles of Pepsi to Cadbury’s Dairy Milk chocolate bars. In these villages, people spent their incomes the same way we all do – on junk food and mobile minutes. How are these supposedly segregated tribal villages so far from mainstream and yet so tied to the same commercial brands as we are?

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What fascinates me about this “globalization paradox” is its potential as a solution to the social development sector’s last mile challenge problem. In spite of the isolation of many areas, the deep penetration by mass market brands and culture give us a channel to reach the bottom of the pyramid. Like the proposed matchbox ad campaign article featured on ThinkChange India last year, soda bottles could be the media for awareness campaigns in rural markets. As American cereal boxes feature brain teasers and puzzles, we can place educational games on the back of potato chip bags to promote literacy and arithmetic.

The fact that there are global brands and songs penetrate deep into difficult-to-reach markets is a hopeful sign the last mile problem. In the social sector, maybe we should stop asking for monetary corporate sponsorship or investment and ask for more in-kind real estate on their packaging to further our marketing reach. And maybe we can canvass popular artists to dedicate a few lines of their work to a development cause. Whatever the method, the “globalization paradox” provides some food for thought on how we can reach out to the bottom of the pyramid.

Last week, the 2010 Villgro fellows took a trip out to Gobichettipalayam, site of Villgro’s pilot project of 10 retail agricultural supplies stores. Located in the Erode district of Tamil Nadu, Gobichettipalayam is the heart of paddy (rice) country. According to Wikipedia, the fertile paddies of Gobi are the cause of the perpetual influx of Tamil dancers and singers who like to film amidst all the lush greenery. The same lush fertile paddies were also the same reason that Villgro decided to pilot its retail store model in Gobi – the local farmers had steady enough crops year round to be willing to try out new agricultural products. Gobi was just ripe for retail agriculture.

The Model

Villgro’s retail model revisits an old-fashioned salesman model that has since gone out of fashion in the West – the Avon model (see model in photo).

Villgro Store ModelIn order to address the challenge of reaching small rural farmers, Villgro has come up with the concept of a Village Level Entrepreneur (VLE), who are local farmers and act as the direct sales representatives for Villgro. Each VLE is responsible for 4 villages, and each Villgro store has 5 VLEs, thus each store can reach 20 villages in an are. Like the Avon ladies who go door-to-door to sell cosmetics, the VLEs reach out to each individual farmer in their village to demonstrate and sell crop fertilizers and animal feeds. VLEs help to increase the credibility of the products by providing local endorsements. In addition, each Villgro store conducts pilot tests locally of each product before they are sold. The pilot tests serve to both demonstrate to farmers the value of the fertlizers / feeds, as well as increase the brand visibility. All of these labor and cost intensive measures are necessary in order to overcome the difficulties of building the trust and distribution channels for sales penetration of the rural market.

We visited with several VLEs and farmers who were conducting pilot tests for Villgro products around the Gobi area. They weren’t the most sophisticated business people, but they were financially savvy and understood the cost-benefit analysis behind the fertilizers and feeds that they used. They said that they saw dramatic benefits in terms of their crop yields and dairy production when they used the organic products distributed by Villgro. The farmer pictured below is a woman with 5 acres of land on which she grows 2 seasons of sugarcane and 1 season of rice. She stands amidst a health strong sugarcane crop that is fertilized using one of the organic products tested by Villgro. Even though she had little knowledge of the Villgro brand, she trusts the VLE who sells products to her and above all, she trusts the results that she sees from usage.

Villgro Farmer

Sustainability

It’s undeniable that sustainability is a key issue in this model. Not only are there great risks in the VLE model, the same ones that have led to the negative perceptions of Avon and other pyramid schemes in the US, but there are also risks with the cost-heavy structure of the sales process. However, there are great benefits to be considered as well, which is why Villgro is hoping to roll out 20 more stores within the next year. The benefits are that farmers are finally aware of the products that are available to help them increase their income generation. The other benefit is also the development of a whole new level of entrepreneurs within the villages. VLEs, who undergo significant training and who develop these businesses, may just lead to the next generation of rural innovations. So even though the risks are high, it is a worthy undertaking and if Villgro can succeed to create a rural distribution channel to take it to that last mile, then we all profit.

This article was originally published by the Wall Street Journal on February 24, 2010, “Budget 2010: Will Rural India Get a Fair Deal”. Within the article, Ms. K. Seeta Prabhu of the UNDP in New Delhi raises a number of extremely relevant concerns about the rural poor of India:

  • 42% of rural farmers live under the poverty line
  • Small acreage farmers compose 84% of total farmers
  • Low agricultural productivity
  • Lack of permanent shelter
  • Lack of electricity and highly inefficient energy usage
  • Lack of employment opportunities outside of agriculture

The situation described demands attention. In response, Ms. Prabhu recommends that the government should take action by injecting massive amounts of stimulus money into large public work projects to build crop warehouses and public toilets, to usher in another “Green Revolution”, to incentivize the installation of bio-plant stoves, etc. The litany of public projects that Ms. Prabhu wants the local governments to undertake is daunting. I find no fault with the problems identified and the end objectives cited, but I do doubt the realistic feasibility of the list of public projects. These proposed solutions are in fact not new; they have been discussed by the development community for some time. The problem doesn’t lie in the solution ideas themselves, but in the implementation – what has been coined as the “last mile challenge”. It’s agreed that these solutions need to happen, but how?

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