New Impact Investment with Essmart
I am excited to announce 3rd Creek Foundation’s (3CF) newest impact investment partnership with Essmart, a company that delivers life-improving goods to the rural poor. This is the second investment that we have made as part of our impact investing pilot program. These impact investments give us the opportunity to contribute additional dollars each year to organizations that maximize our philanthropic impact.
Essmart, a company that aims to provide the world’s essential technologies in every local shop, currently operates a just-in-time distribution system through a network of 1,000+ shopkeepers in southern India. Examples of popular products include solar lights, farming equipment, efficient stoves, and safe motorbike helmets. "Most of Essmart's products help the poor increase their economic productivity," says Jackie Stenson, Essmart cofounder. "For example, a farmer that purchases better farming equipment increases his or her yield. Likewise, a weaver who purchases a solar lamp can now extend his or her productive hours into the evening."
While there have been many life improving products designed for the rural poor over the last decade, the rate of user adoption(an industry term for customers who actually choose to purchase and use those products) has been very low. Essmart co-founders, Diana Jue and Jackie Stenson, both identified this issue independently during their academic studies and set out to understand 1) why durable, life improving products were not reaching the target market and 2) why, in several cases, the rural poor were not even interested in the “better quality” products to improve their economic productivity and quality of life. What they learned during this process, which involved years of fieldwork and travel in India and sub-Saharan Africa, led them to establish Essmart.
The Essmart team comprises a group of bright, and highly motivated individuals. Together they have trained over 1,000 rural shopkeepers to communicate the value of Essmart products, sometimes leading to as much as a 20% increase in shop revenues. They also collect feedback from customers and shopkeepers and communicate that information back up the supply chain to product developers, which helps suppliers produce products better customized for the end customers and at a price point that they can afford.
With its potential to scale, Essmart could help millions of villagers living in poverty increase their economic productivity. It has already grown from 30 shops serving 1,400 end users in 2012 to 1,200 shops and 56,000 end customers to date. We are excited to support Essmart’s growth to achieve further impact.
Our 3CF team first learned of Essmart at the Miller Center for Social Entrepreneurship’s GSBI in August, 2015. At the event, Prashanth Venkataramana, Essmart co-founder and Director of India Operations, gave an impressive presentation which led to further meetings, followed by my field visit to the company’s Bangalore headquarters in December. Here I traveled with Jackie and Prashanth to Essmart’s Krishnagiri distribution center in northern Tamil Nadu province, and visited 5 village shops that are currently working with Essmart.
At each shop, I observed a plethora of extremely cheap and poorly made products, most often imported from China. Each shopkeeper shared with us that their customers are tired of spending money on such products that break within anywhere from 1 day to 1 year. Customers want well-made, durable products, like those that Essmart distributes through its network; reaching the right price point, however, remains a challenge. Essmart’s expansion should help solve this problem by increasing communication channels between end users and suppliers as well as the overall size of the market for such essential technologies.
As we kick off 2016, we are pleased to be doing so in partnership with Essmart.
To support 3rd Creek Foundation to make impact investments in companies like Essmart, please contact us to learn more. Or to make a donation, click here.
Gwen Straley is the Executive Director of 3rd Creek Foundation where she oversees the foundation's grant-making processes and ensures fiscal and regulatory compliance. An emerging markets professional, Gwen has worked for a diverse range of organizations in some of the most complex environments in the world. Prior to moving to Seattle, Gwen managed a large-scale nutrition program in Mogadishu, Somalia. She has also consulted for government, foundations, NGOs, and small businesses in Africa, the Middle East, Asia, and Latin America. Gwen holds an MBA from the Thunderbird School of Global Management and a Bachelor of Arts from Hampshire College with a concentration in Sustainable Development. She is a travel, outdoors, and coffee enthusiast.