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To Strip Down or Not! One among many best strategies to Make a Mass Market Product

Experience is among the many many many key routes in bridging the opening between the rich and the poor in nations like India, and can facilitate enchancment in some methods. It might likely enable free or fast entry to coaching (Cisco Dwara, Khan Academy, The Shuttleworth Foundation), simplify commerce and commerce (ITC’s e-choupals), present employment (Desi Crew’s rural BPOs), current accurately being suppliers (Wipro’s distant foetal accurately being monitor, Neurosynaptic’s ReMeDi), enhance agricultural yield (RTBI’s agri-advisory system, the Kisan Title Centre) and pretty additional. On account of this actuality, know-how does qualify as an ‘essential section’ for the inhabitants on the underside of the pyramid (BoP).

7BC_1That’s moreover a very huge and engaging market for tech companies to enter.

Nonetheless, establishing merchandise for this market merely should not be simple. There are a number of components at play right correct proper right here, from worth and worth to personalized and economics. So, enable us to start out out out this attention-grabbing journey of introspection (the 12 months end is frequently an outstanding time for reflection) by talking with just some consultants on what it takes to assemble a worthwhile product for the BoP, after which check out some worthwhile examples.

Why make merchandise for the BoP
“That’s an easy one. The answer is size. Simply size. And it’s growing,” asserts Sunil Malhotra, founder and CEO, Ideafarms. “On one side, the share of the wallet of each player in the market is shrinking with increased competition. Overseas markets may not be shrinking but have saturated. India is one of the best hunting grounds for large international companies, not just due to market size (and the fact that it is one of the fastest growing) but also because the semi-urban and rural consumers are beginning to aspire for better lifestyles and therefore better products. Going early to a market that’s ready and eager simply makes good business sense.”

“India and China alone constitute around 40 per cent of the world’s population. Both are growing economies where the spending power is on the rise, but there is a high demand for products that offer value rather than products that command a brand premium. Even in developed countries, a large percentage of the population would fall into the category that looks for products that offer value for money,” says Kantheti Srinivas, director, Processor and DSP Apps, Analog Models India, a corporation that gives processors, low-cost MEMS microphones, capacitive contact sensors and totally completely totally different components for merchandise targeted on the mass market.

He affords, “Considering the huge volumes and the opportunities knocking on our doors here, it is important that electronics companies tap the market. However, products in this segment need to offer value and not just be low-cost.”

What kind of merchandise should be made
Markets are shifting from the West. India is predicted to develop to be the fifth largest market on the planet by 2025 (in accordance with a current evaluation by the McKinsey Worldwide Institute). Whereas the scope of the Indian market is apparent, what exactly this market needs is a question that should be answered.
Alok Mittal, managing director of Canaan India, a serious tech enterprise capitalist in India, says, “Given the mobile revolution in the country, electronics has become mainstream and is not a preserve of the wealthy. This has also brought in a lot of demand for localisation, which represents an opportunity for entrepreneurs and electronics companies. Handsets and telecom equipment are set to become one of the largest categories of imports for the country, and hence local manufacturing has risen up in the country’s priority list. All these factors make it attractive for companies to invest in this area. Interestingly, mobile phones are likely to become a platform for adjunct electronics devices, such as those used in remote healthcare and education. We have been seeing start-ups in the healthcare domain as well, like companies that are making sensors, which plug into mobile phones to provide low-cost diagnostics.”

In accordance with Malhotra of Ideafarms, “Leveraging the Internet to empower individuals and enable small businesses in semi-urban and rural areas is a foolproof strategy. The increased access to low-cost, high-speed connectivity in rural areas and cheaper access to content in a hyper-local way become powerful change agents in the way information will be delivered, consumed and shared to up the ante in fulfilling basic human needs. Throw in a smartphone and you have a winner. Much of the rural-urban divide is accentuated by a lack of or a lag in information availability. Smartphones, even the cheapest in the market today, will ensure that the consumer is ‘always on’.”

Designing a washing machine for India (Courtesy: Incubis Consultants)
Designing a washer for India (Courtesy: Incubis Consultants)

Srinivas moreover agrees that the cellphone is among the many many many hottest merchandise on this half. He affords that smaller-screen television and audio-visual strategies, the home-theatre-in-a-box (HTIB) and {{photograph}} voltaic lighting that use renewable vitality deal with the needs of the BoP too, whereas vitality conservation might probably be a worthwhile theme for this market.

Malhotra spells out a kind of thumb rule. “From my point of view, it makes sense to go from the bottom up; to create a portfolio of products and services to fulfill basic needs before going after the goodies. My list of ‘basics’ has healthcare, education and finance at a category level; those areas that create better living conditions such as sanitation, clean water, food and energy at the next; and then communication as a means to keeping abreast with the world as well as a channel for feedback, fun and information exchange. Some of the products we saw in the movie ‘3 Idiots’ are pointers to the kind that we need to look at. Not jugaad but concerted reuse of available and existing technologies to take these prototypes to the commercialisation stage with the help of interdisciplinary experts and groups,” he says.

How do companies make a low-cost product
“Addressing the BoP is neither easy nor cheap. Quite the opposite!” exclaims Malhotra. “There’s no intelligence required if all we have to do is to strip a product down to its essentials to reduce quality. I’m also not a big advocate of inventing niche products to go into these markets. These products must be simple, intuitive, safe and sexy, aka world-class.”

Mittal feels that, “In most cases, cost re-engineering is the first important step. This involves understanding the customers at the BoP, and then designing to those specifications. This may involve introducing features (such as ruggedness and long battery life) and eliminating features (such as accelerometers). Since electronics manufacturing is fairly standardised, the functionality drives most of the cost. As you will have noticed, the current examples of BoP products are mostly from the mobile phones’ domain—from Nokia’s Asha series to Micromax’s dual-SIM phones.”

Malhotra recollects, “Earlier this year, Amit Gulati, who runs Incubis, invited me to participate in an interactive session to think through design ideas for a low-cost washing machine. The workshop brought out some very interesting and fascinating ‘ways of seeing’ that completely overturned the engineering/tech/product way of approaching design problems. Did we need to redesign the washing machine (product) under stricter constraints, like the way most people think—start with an existing product, strip it of features, use cheaper materials and processes, reduce quality and make it low-cost. Or did we need to go up a level and reframe the problem itself?”

The reply, he says, lies all by the context, which is about custom-made, geography, native native climate, behaviour, property and vitality all by the use of the boundaries of environmental friendliness and ecology. Each little concern else is secondary—design, affords, processes, know-how and, lastly, monetary elements.

MACi ECG machine
MACi ECG machine

As shortly as we take into accounts the BoP, we’re inclined to position economics first, nonetheless in accordance with Malhotra, that’s flawed. “I have deliberately kept economics at the bottom of the list. Call it ‘inversion thinking.’ Economics drives everything in today’s world, whereas it is merely a function of supply and demand. In my view, the concept of low cost itself is deeply flawed. What we should really concern ourselves with is lower price and, however counterintuitive it may seem, lower price is not simply lower cost. I’m no economist, but my business sense tells me that I can drive the price down by increasing volumes and reducing profits. Besides, adopting newer business models such as crowd-sourcing and collaborative manufacturing can help address this key issue. So, we must all remember that low cost is different from cost-effective, which is different from value-added. Unless the envisaged product enhances value, low cost has no meaning,” he says.

From the know-how standpoint, Srinivas feels the an equal. He says, “A low-cost product is a misnomer in my opinion. It is a product for the low-cost segment of the market but it need not be a low-quality product. Products in these segments need to be designed ground-up for success. There is no way an existing product replaced with lower-cost components can be a success here.”

That talked about, he components out that digital half costs have moreover gone down significantly all by the newest earlier. “The mass-volume products drive down the cost of these components. Interestingly, OEMs in other industries now tend to use products or components from the PC and mobile industry to drive costs down. Processor costs for a single-core Cortex A8 at 1 GHz have gone down to as low as $6 this year, while two years back these commanded a healthy premium of $20. Memory costs have also been driven down, though they fluctuate due to the changes in supply and demand. The other major component for which costs went down significantly is the display. However, for applications that need strict qualification, like in the military and automotive domain, the price erosion has been far lower.”

Dorai Thodla, founding father of iMorph Inc., affords us his take: “There are two ways to build a product for this market—innovation in low-cost methods, or high volume of sales with normal methods.” So, you can ponder every schemes to steadiness value and price for this market.

How about one concern like…
In case you possibly can get into making or selling tech to the fairly a bit, look to these attention-grabbing examples steered by our consultants for motivation.

Inspiring DIY tales. “There is something called the Maker Movement in the US. It is a self-help culture of building things you need. People who are involved or touched by the Maker Movement build simple prototypes and turn them into low-volume products (initially). Many of them involve electronics. Of late, I have been hearing of many Indian examples too,” remarks Thodla. For instance, a pupil created an app that {{{{couples}}}} a moisture sensor with an Arduino, which tweets when the moisture content material materials supplies provides is beneath a positive diploma (he wished to connect this to a drip irrigation system). A whole lot of present merchandise are being powered by Arduino (and its variants), Raspberry Pi and others. Plus, a variety of sensors hooked as loads as cell fashions are serving as low-cost diagnostic and healthcare devices. {{Photograph}} voltaic lamps, cookers and the like are moreover becoming common themes, for every start-ups and unbiased innovators. “Though expensive initially, these will eventually lower running costs (due to the reduction in oil and electricity usage) and make sense for the BoP. The next generation of these devices will be enabled by intelligence (such as lamps that turn on/off based on ambient light),” says Thodla.

MACi ECG machine. “GE India has been a pioneer in reverse innovation, leading product design for emerging markets. Its innovations are not just a cost reduction of existing designs, but completely redesigned from the ground-up to make a product that is several times cheaper and yet offers reasonable value,” says Srinivas. GE’s low-cost MACi ECG machine, launched just some years beforehand, was developed by researchers in Bengaluru after understanding the need for a low-cost, sturdy, moveable ECG machine for low-income communities. MACi is battery-operated, moveable and able to printing in three channels. With one battery value, it should likely full 500 three-channel ECGs or 250 single-channel ECGs. So, with one battery value, it may very well be utilized in a rural hospital with out electrical vitality for close to a month. MACi is priced at spherical Rs 25,000 and is perhaps bought by simple month-to-month instalments. After worthwhile early adoption, the machine was moreover tailor-made throughout the market to value-oriented prospects in developed nations identical to the US.

Lullaby Baby Hotter. One completely totally different of GE’s low-cost, high-value enhancements, Lullaby Baby Hotter affords 69 per cent warm-up, enabling nurses to take care of new-born arrivals with pretty a bit fairly a bit loads a lot much less stress. The product presents value for money and ease of use, every of which may very well be important for mass utilization. GE has included know-how contained within the type of the Calrod heater for uniform heat distribution, which makes it simple even for novices to place the kid all by the hotter. The warmer moreover has colour-coded safety alarms, a visually-coded administration panel and well-positioned lights for simple utilization. In accordance with the company’s tales, the instrument presents worth monetary financial monetary financial savings of as fairly a bit as ` 107,000. It consumes 60 per cent fairly a bit loads a lot much less vitality on start-up and 20 per cent fairly a bit loads a lot much less vitality over 24 hours. There are extra worth monetary financial monetary financial savings attributable to Calrod’s lifetime assure, lower wattage and reliable probes. “GE’s MACi ECG machine and the Lullaby Baby Warmers have won international acclaim. Now these products are exported to several countries including developed nations,” says Srinivas.

Lullaby Baby Warmer
Lullaby Baby Hotter
Low-cost smartphone
Low-cost smartphone
Low-cost tablets
Low-cost tablets
Tata Nano
Tata Nano  Low-cost tablets. Low-cost tablets, resembling Aakash with major alternatives and open current software program program program program, are moreover becoming common as we converse. Comparatively than using these tablets as general-purpose machines which have the entire selections, customised variations, which have solely the alternate options essential to a bunch, might probably be utilized. That’s one completely totally different methodology of making a product cost-effective.

Cell-controlled irrigation. Nano Ganesh is an utility developed by Pune-based Ossian Agro Automation. It has been in use for spherical 5 years now, and continues to be common in Maharashtra. It has even been recognised by the World Monetary establishment as a notable know-how for rising nations, attributable to its simplicity and affordability. Nano Ganesh, which moreover obtained a Nokia innovation award, permits farmers to stage out their irrigation pumps on and off by remotely using a cellphone. A cell modem is positioned on the pump and associated to a major cellphone. This allows distant administration of the pump’s starter panel. When the farmer calls this cellphone from any location, a tone is heard if the motor is on, and there isn’t any sound if the motor is off. The farmer can then flip the motor on or off by a 440-volt starter change that responds to a code amount despatched by means of SMS from the farmer’s cellphone to the cellphone hooked as loads as a result of the motor. Nano Ganesh is perhaps hooked as loads as any electrical starter and motor pump. It costs Rs 2800 plus taxes, and setting it up is easy and automatic. Purchasers don’t should be literate to know the straightforward tones. Full, it’s wise for the agro group.

Low-cost smartphones. The preliminary smartphones arrived at a price-point of ` 30,000, which was methodology an extreme quantity of for a point out Indian. So, how most fascinating can this product be optimised for a low-income group? “The high-end phones came with support for multi-band 3G roaming capability. For an average Indian, this is not needed. So, costs are saved by removing this feature. Optimising the software for lower memory footprint gives the opportunity to save some more costs. Earlier, systems used NAND flash boot while still having an SD card. Products for the low-end markets pushed technology to use an SD card boot, thus saving the cost of additional memory. While a natural drop in the prices helped this market, lower-resolution displays and using a single speaker to give virtualisation effects all helped address the needs of this market. Adding dual-SIM capability added the icing on the cake for this segment,” explains Srinivas fantastically!

Tata Nano. It’s a moderately worthwhile automotive, with respectable value and low worth. “The car is designed for those who can afford a two-wheeler but can stretch a bit to get the comfort of a car,” says Srinivas. “This meant the car had to have all the necessary features but be priced effectively. This implied optimising the space inside the car, which also meant re-positioning the engine accordingly, for both efficiency and space. This needed a complete re-design of the engine and chassis. Tata Motors also went ahead and re-designed the doors and windows for lower weight so as to improve the efficiency. Components have been manufactured indigenously to the extent possible to save on the import costs.”

Value-effective computing. In 2011, the federal authorities of Rajasthan focussed its consideration on an infinite computer coaching program, which involved organising computing labs in spherical 2000 schools unfold all by the use of the state’s 33 districts. If utilized the identical outdated methodology, it’d want meant an unbearable preliminary funding atop the continued costs in assist, repairs, vitality present and so forth. Exploring alternatives to this, they bought correct proper right here all by the use of NComputing’s wise and cost-effective computing reply. NComputing presents desktop virtualisation alternatives, which give entry to computing at a fraction of the price of bizarre server-PC based networks. This allows tutorial institutions, hospitals and rural BPOs to know their needs at decrease value components. Normally, a point out computer explicit particular person makes use of merely 5-10 per cent of the PC’s efficiency; the remaining (approx. 90 per cent) goes waste. Contained within the case of the Rajasthan schools too, their completely totally different of NComputing reply was based on the logic that college children use solely a fraction of a point out PC’s computing efficiency, since their discovering out needs are pretty simple. Establishing particular explicit particular person PCs for each pupil is subsequently a waste of efficiency and money. On account of this actuality, they arrange 10 NComputing digital desktops in each lab, which utilise the unused computing vitality of the PC and share with pretty a lot of prospects using NComputing’s vSpace desktop virtualisation software program program program program. A keyboard, mouse and monitor are associated to each NComputing entry machine, making it appear as if each pupil has a PC to work on! Apart from the low {{{{hardware}}}} acquisition worth, the reply moreover meant 75 per cent fairly a bit loads a lot much less assist and maintenance costs, and 90 per cent fairly a bit loads a lot much less vitality consumption as NComputing fashions use merely 1-5 watts {{{of electrical}}} vitality in distinction with 120-150 watts in an everyday PC. It’s a essential income in distant components of the state the place vitality present is a perennial topic. In some methods, along with worth, NComputing’s reply appeared a most fascinating match for rural India’s computing needs.

Value-effective computing
There are tons extra alternate selections and much more ideas, if solely we pause to contemplate the needs and earnings ranges of the fairly a bit. In accordance with a Press Notion of India launch dated February 2013, after the unfortunate women harassment incidents in New Delhi, Union Minister of Communications & IT, Kapil Sibal, talked about to Rajat Moona, director widespread, C-DAC, “I want a wrist watch that will videograph, set up an alarm and will call up dedicated lines. Let’s have a GPS system, and let’s produce this watch for less than ` 1000 for the safety of the citizens of our country.” Enable us to hope to see this and totally completely totally different ideas come to life, shortly!

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