The Mystery of Bottom of Pyramid : An interview with Kirti Mishra

Mr. Kirti Mishra, who has more than 22 years of experience in strategizing and implementing Sustainable Business Models (SBM), on day 2 of Colloquium, annual business conclave organized at IIM Indore spoke about the potential of the sanitation sector in stimulating other industries and explained from an economic point of view why it made sense for other industries to be a part of and support the sanitation drive. He discussed how the BoP Sector has immense potential for all the industries.

 

Pradosh: Sir, first of all, thank you very much for coming to IIM Indore for Colloquium.

Kirti: That’s my pleasure.

Pradosh: The presentation was so nice and it was on a quite different topic than the ones we got to listen today.

Kirti: Thanks, and that I agree, it was on a different topic.

Pradosh: So sir, in 20 years of experience you had in Mart, consulting experience with the BoP entrepreneurs; how is it different from the work you do now at Ecociate?

Kirti:  If you look at Mart, primarily it was rural marketing which was the major focus and business models looking at BoP & taking principles of rural marketing into it. And another end was kind of livelihoods, the rural development part. In Ecociate the focus is entirely different. We definitely look at marketing as a core area to offer in the BoP space but over and above we are now focussing on sustainability around everything like a sustainable business model; and not just sustainability from a profiteering point of view but sustainability in its truest from- the environment, the social inclusion and profit. So this whole space of sustainability and BoP is a unique combination we are opting. That’s the way our expertise and offering would be in this space.

Pradosh: The sustainability part in BoP sector, what is the stake of World Bank in this? How do they want to change the condition of India?

Kirti:  For the record, I am not from World Bank, I am just a consultant for World Bank, I am from Ecociate. If you look at them as a development agency, they have a huge focus on sustainability. Now in last 10 years, they have been working on the social inclusion part – be it finance sector or agricultural sector, a huge amount of effort is going on to bring inclusion of poor into the mainstream economy. Of late, 3-5 years, you will notice a lot of climates resilient, climate adaptive project. Within those sectors have started coming energy, agri-business and other related sectors. So the World Bank’s entire agenda is now to create a solution which is climate adaptive, resilient and at the same time bringing inclusion, ensuring that the poor are not left out of this mainstream economy.

Pradosh:  “There is nothing below the bottom of pyramid”- how true is that? Since spending capability of people below the boom of the pyramid is less, how can a business manifest on that?

Kirti:  Absolutely good question. In absolute term the BOP, you may find some argument relevant. Within the BOP, let’s say within $2 income, lots of people are there in that bracket. Imagine if 60-70 crore people are there in that segment, it is not just one segment, there are many segments within that, that constitutes of people who do not have basic amenities to survive- 15-20% maybe, who are extremely poor- that’s where the BoP market may not work in the beginning but other layers which are above this ‘real bottom’ layer- like in a village, people having basic level of income are ready to move aspirational products, ready to go for brands. They have certain income at their disposal at their level which they now have started using it for such products. That’s where we have to look at. Within the BOP there is potential, there is already existing market within the BOP, very limited. There is a potential segment that needs to be catered at there is a very difficult segment. So unless you strategize at that level, you may not find that answer. So just taking a homogenous market segmentation of entire BOP will never find a solution. We have worked last 20 years in this area so I can tell you with a guarantee, if you have a right segmentation and understanding of this then you can position your things and strategize the same into your segment, you have an answer then.

Pradosh: While working at Mart, you have worked with many MNCs which are very large in scale, what is their opinion in this purpose of BoP?

Kirti:  For e.g. I gave the quote of Paul Paulman. After sixteen years he still believes what he has spent or the company has spent at BoP sectors, is giving them enough return not only in the monetary term but in the goodwill and all that. So like the HULs or GEs  or TATAs of this world, wherever we have worked, they are quite happy because they have started penetrating into the market which was otherwise not with them. For e.g. TATA Steel, they have a roof shed as a product. So they used to struggle in the rural marketing and we gave them a strategy and they penetrated into the market in a good way. They found like 30% growth in the rural sales. If you do the designing of the strategy in the right way, you have a market there. So those companies are quite happy and they have been constantly investing in those areas. So Indian companies and Multinationals, both have been there, like Panasonic has been working in this sector for long. Recently, we learnt that Facebook and others are also interested. So the point again is how to design that strategy to get into that rural segment. There is a positive environment of getting into the rural BOP.

Pradosh: So sir, as you had told, in BOP sector there is a lot of opportunity for the social entrepreneurs who may want to go into that sector, so for any particular reason that you thought that this sanitation sector is more important than others?

Kirti:  I have worked in agribusiness, I have worked in water resources, I have worked in energy, so I have experience around everything. But point is, sanitation has become an important subject because Govt. has taken a very important view around it. Not only views, they have started allocating a huge amount of resources for giving subsidies for the rural houses to construct. So that something is very unique and that’s how everything has been triggered to be on fast track. It is not that rural toilets were not getting constructed. They were there, but everything has got into speed and pace because the whole movement started building around the Swatch Bharat Mission. That when a lot of organisations, big or small, they have started using their resources time to innovate new solutions and lots of actions are happening now. That’s where we as a consultant research group would be there. That does not mean we are not working in other sectors, but sanitation is kind of a hot subject now.

Pradosh: Sir, Finally I will want to ask, what will be your message to the soon to MBA graduates- who are much more interested in MNCs?

Kirti:  My message is very simple since I have spent my entire career in rural and BOP, any small good that you do has a very huge impact on the lives of the poor. In today’s context lot of professionals are moving into that space because, in a larger context, catering to the requirements of somebody sitting in a metro has no excitement. If you can solve the problems of a poor person by creating some good strategy, that I think is a huge satisfaction for a person. It’s not true that you will not get money, you might not get the salaries of big MNCs but you will get paid decently. With that decent pay, if you do something that is meaningful, that is something I will suggest young generations look into and start valuing this. Because India needs such bright students to put their mind into these issues more than anybody else. I have seen a lot of IIM graduates in World Bank and in other sectors. They are doing very good work in this space. So I’ll urge rather that more and more people join this rural stem.

Pradosh:  Thank you very much, Sir.

Kirti:  A pleasure.

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