I often use the phrase “bottom of the pyramid” to refer to that part of the untapped markets of the world that has people living on less than $2 a day. And I have realized that in India, home to 345 million poor people, you cannot be a sustainable consumer unless you are a producer.
I would like to discuss how information and access to information are the most important factors to overcome poverty, exploitation, corruption, economic deprivation and violation of rights. Although I have always believed in the power of information and access, I feel vindicated today through a research done by Institute of Rural Management-Anand and Indian Institute of Management-Calcutta titled From Market Separation to Market Development at Bottom of India’s Socio-Economic Pyramid: A Case Study on Digital Empowerment Foundation’s Chanderiyaan Project.
Ramendra Singh and Pratik Modi, the authors of the paper, say that “markets can be developed at the bottom of the pyramid if market separations between producers and consumers in the markets are reduced through the following: 1) Spatial separation or the physical distances between producers and consumers; 2) temporal separation or the time difference between production and consumption; 3) informational separation or the informational asymmetry between producers and consumers related to products and market conditions, and; 4) financial separation or the lack of consumers’ purchasing power when they are willing to fulfil their needs”.
Supported by the information technology ministry and Media Lab Asia, the Chanderiyaan project is defined as the integration of digital technology and media into the entire life cycle of Chanderi weavers cluster in Ashok Nagar district of Madhya Pradesh where 4,000 handloom households complement a population 40,000. When the Chanderiyaan project started three years ago, the annual turnover of Chanderi’s weaving products was Rs.70 crore but most handloom households were surviving on an average income of less than Rs.3,000. The whole of Chanderi was suffering from information asymmetry between producers, suppliers, market, retail and consumers. The reason why the suppliers and master weavers controlled the market was because their level of information of the whole market, demand and supply and especially, the design needs was much higher.
Besides, the whole cluster of weavers depended on a few designers and the suppliers who would always share information in their own interest and there was no way the weavers could be informed about general market trend, or price or demand or design options.
Three years ago, there was no cyber café, no teller machines and state-owned Bharat Sanchar Nigam Ltd was the only Internet provider. When Chanderiyaan was established, it created a centre for free flow of information, English literacy for hundreds, textile and apparel designers on computers, digital drum printers for full-sized designs and digitalization of all historical patterns. The project also provided 25 looms for daily wage weavers, corrected daily wages, provided raw material to those who became members of Chanderiyaan self-help groups and made available an annual exhibition calendar to those who wanted to sell directly to customers.
According to the research report, the overall revenue of Chanderi weavers has risen to Rs.150 crore, more than double in just three years. The average income of weaver families has jumped to Rs.6,000 or more. My recommendation would be that the textiles ministry take up the onus to digitally enable all the 400 textile-based clusters in the country who are producing more than Rs.60,000 crore in revenue because digital inclusion can easily double the revenues and also overcome the information asymmetry.
Osama Manzar is founder-director of Digital Empowerment Foundation. He is chairman of the Manthan Award and a member of a panel on Internet governance at the ministry of communications and information technology.
Follow him on Twitter @osamamanzar