This article is the third in a three-part series exploring the role Mercy Corps played in bringing solar power to rural Uganda.
In our first article, we explored how Mercy Corps conducted a comprehensive market analysis, which painted a picture of strong potential demand for solar lanterns from rural farming families. In the second, we discovered how Mercy Corps connected suppliers to shops and shops to customers by building buzz about solar.
Bringing any new product to market is bound to hit some bumps in the road. While smoothing those bumps to get solar products to rural families in Uganda, Mercy Corps discovered that they had cleared a path for more life-improving products, too.
Let’s talk about the bumps in the road first:
Bump #1: Not all suppliers are created equal
In choosing supply partners, Mercy Corps looked for solar companies that not only offered highly rated products but companies that were also interested in entering the northern Ugandan market and who had the bandwidth and appetite for the risk required to meet the needs of rural customers. A few partners jumped on board. But, even after careful vetting, one company and its products failed to meet quality expectations of early businesses and customers. This company was dropped from participation in Mercy Corps’ project due to its poor performance. “Market spoilage” is a serious risk for new technology and one Mercy Corps worked hard to both overcome and mitigate.
Crowding-in a new and unfamiliar product that doesn’t work as well as advertised, breaks too easily and for which there are no trained technicians, is a fast way to lose most potential customers in a market,” said Kim Beevers, Mercy Corps’ then project manager. “Quality control is an important role for a nonprofit to play in a market facilitation project that necessitates building relationships between suppliers, resellers and buyers.
Another way to dampen seller confidence and to lose customers is to market a great product with an inconsistent and unreliable supply. One of the selected solar company participants offered a higher-quality, multifunctional and lower-cost product that shopkeepers promoted and customers demanded. But, shortly after the project got off the ground, the company mismanaged its inventory, causing a large -- but thankfully temporary -- gap in supply. In the interim, local business partners were forced to turn away customers.
Bump #2: Getting there is half the battle
To boost the supply side of the chain, Mercy Corps hosted a ‘meet and greet’ for rural shop owners to develop personal connections with the urban solar companies and local financial institution branches to find out more about the products and what financing might be available to begin or to grow their businesses to sell solar. Though many shopkeepers expressed interest in selling solar through prior information sharing events, fewer than expected attended the event.
Mercy Corps discovered that the main culprit here was transportation – travel is expensive and takes significantly longer in places where the roads are bad and buses are infrequent. Often, there is no mode of transport at all. Simple solution? To keep these shop owners involved, Mercy Corps took to the phones and even met them in their shops in-person to reiterate the information shared at the networking event and to deliver contact information for solar companies. Then, the Mercy Corps team shared shop owner contact information with each solar company. In their expansion plan, the team will be hosting more meet and greets in more locations closer to shopkeepers in hopes that transport will not be as big of an impediment to connecting interested parties.
Bump #3: Perceptions vs. Reality + Money
Introducing solar products to rural, northern Uganda took one person—with support from colleagues—nine months and $19,000, that included conducting the energy poverty survey research, managing the market analysis, identifying and matching up solar companies and local shopkeepers, managing a range of partners, hosting product demos for consumers and handling marketing and communications.
Because much of this upfront work can inform the project’s expansion, piloting solar in new regions will be even more efficient. Mercy Corps Uganda plans to scale their solar project across four districts in the coming months and another three next year. They are looking for new, improved and varied products and services for which this market facilitation model could also be applied.
Solar is just the beginning
Perhaps most significantly, the channels built to get solar products to rural families have paved the way for other important—sometimes life-saving—products.
We asked ourselves, how can we leverage the channels we’ve created to get more supplies to farmers, more useful products to families?” said Beevers. “How can we drop a Wal-Mart into rural, northern Uganda?
Mercy Corps is working to develop a mobile-based catalogue of items that shopkeepers or households can purchase via phone, have shipped to their shops to stock for local consumers to buy or directly to their homes. The team is focusing on pro-poor products that have been proven to make a strong impact in the lives of low-income families. Poor distribution models and mechanisms prevent the market penetration that these kinds of products could--and should-- have. Products include, oral rehydration salts, hand pumps, water filters, adjustable eye glasses, brick presses, fuel efficient stoves, micro-irrigation systems, mechanized tillage and borehole spare parts.
Our model will use innovations in mobile technology to provide a marketing, payment and information management backbone,” said Tim Sparkman, Mercy Corps Uganda Deputy Country Director and Director of Programs. “We want to leverage economies of scale for both companies and consumers.
If solar smoothed the bumps along the road to northern Uganda, the team’s next plan will turn that road into a super-highway of critically needed goods that improve lives.