Ajaita Shah, CEO & Founder, Frontier Markets, is in a reflective mood. “Somewhere in my journey of self-discovery during my undergraduate years in New York, I would always think about where all the injustice in the world came from? For me, the answer lay in poverty,” she says. “The world is unequal and, therefore, there’s misery and injustice. I wanted to come back to India and play a role in addressing inequality and injustice.”
Eventually, Ajaita did return to her homeland with a desire to create maximum impact in rural India and empower its vast customer base. She viewed the complex, diverse and culturally rich rural marketplace as a hotbed of opportunity to usher in innovation. The sheer diversity of rural India afforded scope for product companies to customise designs for customers in the hinterlands as their needs are different from those in urban areas. Ajaita was convinced that this would fuel product and service innovation and create a credible platform that would enable her to monetise customer behavior and purchase patterns, along the lines of tech behemoth Google.
The rising rural middle class that had access to smartphones, reliable Internet connectivity, quality education, earning potential–and rising aspirations—was an attractive target segment for Ajaita’s long-term entrepreneurial goals.
She recognised the immense potential rural India held for organisations seeking to tap into its markets to sell their products and services. “I was always attracted toward rural India and wanted to do something for the socio-economically disadvantaged segments of our population,” she says. “No product and service company has been able to unlock this market successfully and with an experience of over 15 years, I understood its unique needs.”
Ajaita observed that while popular consumer brands were keen on servicing the rural customer base, they faced a plethora of challenges that prevented them from tapping into this thriving market.
For most companies, it was economically unfeasible to service India’s 100m+ rural households that were scattered over 700,000 villages. They found it daunting to invest in these markets, engage at close quarters with the customer base, determine the product-market fit, and then invest in a new supply chain to accommodate the unique needs of the rural customer base. However, even if leading Indian and MNC brands failed to harness the potential of the rural marketplace, they were unwilling to let go of this valuable business opportunity. After all, according to recent estimates, the consumer good market in rural India is expected hit $100 billion by 2025.
Seizing a unique opportunity
Ajaita’s innate passion to unlock the potential of India’s “rural phenomenon” and build impact by creating a ‘modern’ rural marketplace led her to found Frontier Markets in 2011. The startup gets its name from the notion of rural India being a ‘distant concept’, the ‘final frontier’, especially in developing countries.
The objective was to provide rural customers with quality products and services at affordable rates, in a hassle-free, convenient manner. According to Ajaita, the rural customer has similar aspirations as his urban counterpart: the need for doorstep deliveries, prompt after-sales services and quality control that offers value for money. Her rich experience in microfinance helped her gain deep insights into how to service rural customers and give them easy access to quality products and services.
Besides, Frontier Markets sought to address the market gaps and anomalies with regard to how product and service companies approached issues, such as quality and price point, among others. The companies failed to grasp the pulse of the rural customer base. “We were not building the system right,” explains Ajaita. “I think what got me to the edge was when I observed how India’s rural market place—the largest in the country—was overlooked and neglected by consumer brands. This led me to set up Frontier Markets and leave microfinance, because, frankly, financial services is not the silver bullet to solve rural India’s problems.”
Sahelis: A powerful sales network led by digitally savvy women
Frontier Markets’ initial days focused on clean energy products. Over time, the startup built the largest assisted e-commerce platform led by rural women. One of the major turning points for the company was in 2015 when it adopted a gender-focused business module and onboarded rural women as its grassroots sales force. Frontier Markets provides rural women an opportunity to work and gain financial independence. This has helped these women live with dignity and be a voice of change in their own community.
The concept of Frontier Markets was simplifying rural lives, aka, Saral Jeevan. This idea gave birth to Saral Jeevan Sahelis: rural women helping their neighbours access a variety of products and services at their doorstep, using an assisted e-commerce solution call the Meri Saheli App.
“Women play a major role in rural insights, and since it’s women who use our products, they would get help us understand the needs and aspirations of rural customers,” says Ajaita. “This help brands design the products based on the customer data insights.”
Trusted local women influencers, or Sahelis, were recruited across India’s villages to reach potential customers in the rural markets. Frontier Markets saw the potential opportunity for brands to gain valuable customer insights through the powerful network of Sahelis. For instance, if a customer conveys to a Saheli about the kind of fan she wants to purchase, this information is conveyed to consumer brands. Consumer brands may choose to bid for this customer, making Frontier Markets a powerful marketing platform that delivers actual results to organisations.
The startup aims to be an influencer in the rural marketing value chain and access critical data (through Sahelis) that can be leveraged by brands. It monetises consumer insights at scale. For example, Frontier Markets has actionable insights on why FMCG giant Hindustan Unilever Limited’s brand Ghadi detergent powder sells more than its Rin bar in the rural markets. According to Ajaita, a key factor for this product preference is due to an increasing number of rural women purchasing washing machines that reduces their need for Rin bar.
“We’ve combined two critical elements that we believe drive rural market influence: technology and women,” elaborates Ajaita. “We help local women become village-level entrepreneurs and equip them with a mobile app to assist rural customers in gaining an online shopping experience. Think of Frontier Markets Saheli as a digital shop in a village.”
Today, 10,000 Sahelis (Saral Jeevan Saheli) actively work in 2,500 villages.
The Sahelis model: How it works
- Local women entrepreneurs use the Frontier Markets app to access products and services that they sell to their neighbours.
- Women leverage their deep and long-term connects to their neighbours and become the trusted sales force, or ‘digital shop’ for the company.
- Sahelis invite their neighbours to have online-offline store experience – showcasing products, facilitating online sales, and coordinating deliveries.
- The demand from these groups of women entrepreneurs is consolidated and serviced using an efficient supply chain
- Our model enables organisations from FMCGs to consumer durables companies and financial services to
- Access new markets
- Increase their rural customer base
- Compete for larger market share to exponentially expand their markets beyond their current geographies
- Sahelis’ source of income is through sharing customer data insights and sales. They are the trusted influencers of their village, bridging the gap between products and rural families.
How does Frontier Markets leverage technology with the help of trusted local women influencers?
- Frontier Markets designed the technology to be a simple, easy to use and intuitive, rural friendly front-end app. A robust back-end manages all the operations with real-time tracking on the ground.
- This entire value chain is digitised through Frontier Market’s proprietary e-commerce platform which enables Sahelis and the delivery teams to manage all transactions on a real-time basis. The Meri Saheli app was designed to support local languages, voice bots, voice to text, and an AI training bot to help all kinds of women (digitally savvy or illiterate) to use a digital tool to accomplish their tasks.
- The Saheli app enables ‘Sahelis’ to collect data, showcase products, generate demand, process sales, and collect and make payments online—it’s their main business tool. The app is also a key marketing tool for Frontier Markets as it connects the customer to the overall ‘purchasing’ experience.
- Sahelis are supported by local tech-enabled delivery teams, ensuring every customer gets their products delivered to their doorsteps within 48 hours, and managing after-sales service issues.
- The Frontier Markets app tracks real-time data and insights from all operations, from developing customer insights for targeting digital and in-person marketing to influencing customers’ purchasing decisions and influencing product companies on their product basket, specifically designed for the rural customer.
- All customer transactions are captured in the company’s database to build their credit history and gain insights on their purchase patterns and demands.
- Frontier Markets shares the data with companies to help them innovate their new product and service offerings through the e-commerce platform.
- Sahelis use the app for sales orders, managing their daily tasks, data collection, and delivery facilitation. Sahelis’s showcase the products available on our app to the potential customers and make payments
The way forward
Currently, Frontier Markets has launched a B2C digital marketing tool that allows the customer to directly browse, place orders, and provide feedback. This has increased the company’s access to customer data ten-fold. “Customers want to tell us what they need, because they know we’ll make it happen,” says Ajaita.
She adds that the time is opportune to onboard more Sahelis as there is a high demand to drive income opportunities for women, and deliver quality services to rural communities. Frontier Markets has partnered with women-run organisations across seven Indian states. “We are raising $10M to scale from 10,000 Sahelis to 100,000 Sahelis in the next two years to reach one million and impact 100 million in five years,” says Ajaita.
Lessons learned
Ajaita emphasises that one of the most valuable lessons she has learned as an entrepreneur is the potential of the rural customer that has gone untapped for too long. She recognised early in her startup journey that rural women are hungry to earn, learn and contribute to the economic well-being of their families. According to her, rural India’s best asset is social capital that women have in abundance.
“I feel so alive and empowered by the people around me,” she says. “India’s rural population may be the most deprived but are the richest because of their resilience, humility and empathy. Their women folk are smart, savvy and hungry for work. We only have to find the right model to take them to the next level of growth.”
Clearly, Ajaita Shah has already got that one covered.
