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Entries in development (18)

Friday
Jun242016

Alibaba, rural consumers and the last mile

China's leading ecommerce company, Alibaba, may be dealing with some growing pains, but there is no question that it has been successful in expanding its size and reach.

One factor in this success is Alibaba’s Taobao Village project, which is bringing rural areas of the country access to online shopping. In October 2014, Alibaba announced plans to invest 10 billion yuan in logistics, hardware, and training to push its e-commerce model into 100,000 villages in the next three to five years. It’s opening warehouses and working with delivery companies and local officials.

A Bloomberg article from last August profiles how the project works in Yunnan. The project is centered on the Taobao rural service center -- often located in local convenience stores -- where villagers can access a computer and Internet connection to browse and order goods. Their purchases are then delivered through the same service center, a convenience for the customer, and a benefit to the shop owners. Alibaba provides computers and monitors, ensures timely delivery of purchases, and trains villagers to serve as its representatives in the centers.

This is happening against a backdrop of shifting demographics and economics in China. More Internet-savvy migrant workers are returning home, and Alibaba's success is even attracting competition. JD.com planned to open more than 500 rural service centers by the end of 2015.

According to Bloomberg, the companies’ rural forays fit in with government policy. Beijing wants to boost household consumption as a share of gross domestic product, so China’s government will “support migrant workers, college graduates, and army veterans who wish to return to their rural home towns to start new businesses” and “encourage e-commerce in rural areas” the Xinhua News Agency reported last June.

We are interested in how Alibaba and its competitors are trying to solve the last mile infrastructure and talent issue in the countryside by working with local businesses and government, while attracting Internet-savvy migrant workers to return to their homeland.

Image source: Alibaba.com

-- Yichen Rao 饶一晨

 

Thursday
Apr212016

Danish example demonstrates how partnering delivers results for SDG incubators

A recent report in Business Fights Poverty cites the example of Danish biotech company Novozymes, which implemented a strategy called Partnering for Impact to achieve the greatest impact for underserved markets.

Novozymes realized its expertise in the technical innovation space would be insufficient in nations looking to improve their sustainable development goals (SDGs), because pieces of important infrastructure are underdeveloped or missing. For that reason, Novozymes participated in an incubator called DIVA Ventures L3C, which includes foundations, corporations and impact investors that focuses on increasing capabilities and spreading risk. All partners bring their ideas for positive societal change to a joint team governed to DIVA. The venture is then developed systematically to ensure bankable returns. Corporations like Novozymes benefit from strong organizations with proven track records while its partners can see their ideas for societal growth scaled to provide the greatest impact.

Image source: Business Fights Poverty

-- Catalysts

Friday
Apr012016

The race to connect the next billion, and the business models to get there

Google and Facebook both have a mission – to “connect the next billion,” as Google puts it. This Financial Times article, “Facebook, Google and the race to sign up India,” explores the tech giants’ initiatives that are “bringing internet access to India’s masses as a way of alleviating poverty, improving education and creating jobs.”

Google, in partnership with NGO Tata Trusts, is sending thousands of tech-connected bikes to women in rural Indian villages. (In these regions, women are much less connected than men.) The bikes, loaded with two Android smartphones and two tablets, educate women about using the internet, and these women can then pass their knowledge on to other villages. Google also aims to launch its pilot technology, “Project Loon” later this year, sending balloons into the sky that will provide internet connectivity to remote areas. Additionally, the company, through a partnership with India’s railway ministry, is in the process of rolling out high-speed wifi to a hundred train stations this year.

Facebook, on the other hand, has been heavily focused on its “Free Basics” program. This program, an app that is part of the social network’s Internet.org initiative, offers users of partner telecoms networks free access to Facebook and a number of other well-known sites (Wikipedia, BBC News, Accuweather, etc.) Since it’s 2004 launch, 38 countries have come on board.

Both companies’ goals are echoing those of the United Nations’ 2030 Agenda for Sustainable Development, which includes an aim of universal internet access. What’s notable is that these tech giants aren’t using funds they’ve set aside for corporate social responsibility, rather they’re driving these initiatives with money from their core budgets. This speaks to their belief that connecting the unconnected is more than just a charity effort, rather that there is “solid business logic of investing in connectivity in India and other developing markets,” according to the Financial Times article, and a benefit for both companies to gain a first movers advantage in these regions.

Despite their grandeur and reputation, these companies still face challenges developing business models that incorporate their social impact efforts. Recently, Facebook’s Free Basics app was blocked by India’s telecom regulators, after they ruled that “differential pricing” by internet companies infringes on the principles of net neutrality. While the ban wasn’t targeted specifically at Facebook, it has created a major roadblock for the company. However, the tech giant isn’t ready to wave the white flag allowing Google to take the lead in this race to connectivity just yet, saying it plans to pursue other connectivity projects in the region.

-- Clara Shen

Monday
Mar212016

Bureaucracy (and worse) vs entrepreneurship in fighting poverty

The trailer for the documentary Poverty Inc. challenges the traditional charity/aid approach to fighting poverty, and starkly suggests that--while intentions may be good--the donor-driven approach will never bring about real change. 

At what point do aid efforts become so entrenched that they effectively compete against real business development? And how can real, sustainable economic growth be cultivated?  These are important questions to ask. As one interviewee in the film states,

I know about countries that developed on trade and innovation and business. I don't know of any that got so much aid they suddenly became a first world country."

We are focused on developing mutual solutions based on real business models, and are interested in your point of take on the issues raised here.

 

POVERTY, INC. | Official Trailer from POVERTY, INC. | The Movie on Vimeo.

 

-- Clara Shen

Tuesday
Nov242015

Sustainability and poverty alleviation: focus on market-based solutions

I enjoyed a collection of recent articles in the New York Times focusing on the role of the private sector in sustainability and market based solutions to poverty, and recommend them to those interested in the topic. (Click on the headlines for the full articles).

Saving the World, Startup Style

The author notes that over the past 10 years, there has been a "quiet revolution" in the way many scholars and advocates think about aid. The revolutionary shift is the central philosophy that rich countries shouldn’t see themselves as responsible for coming up with theories about how poor countries can become richer. Rather, he says, "the rich countries allow the poor ones to determine what they think needs to happen — more girls in school, more vaccination, better access to global markets for farmers — and then pay money to whoever comes up with an actual solution. Governments, nonprofits and private-sector companies can compete on who can do this best."

Buffett's Grandson Seeks Own Investment Route: Social Change

Howard Warren Buffett, the grandson of the Berkshire Hathaway founder Warren E. Buffett has co-founded an operating company with big ambitions — essentially mimicking the structure of Berkshire Hathaway, but with a major difference in strategy. The plan is for the new company, called i(x) Investments, to invest in early-stage and undervalued companies that are working on issues such as clean energy, sustainable agriculture and water scarcity. “We’re looking at the long-term horizon and investments that are doing more than avoiding bad, but are actually trying to improve the world,” Mr. Buffett said. “It’s about taking the potential for capitalism to the next level.”

Unilver Finds that Shrinking Its Footprint Is A Giant Task

Unilever CEO Paul Polman has made sustainable production — of Hellmann’s, Lipton tea, Dove soap, Axe body spray and all the other products Unilever makes — the company’s top priority. Detergents are being reformulated, packaging is being reduced, and the company is taking steps to find more more eco-friendly food ingredients. But the transformation is not a simple one, and the article notes that before Unilever can "transform the world," it must focus on changes within the company.

Image source: New York Times

-- Clara Shen