Connecting the Base of the Pyramid to Global Markets Through E-commerce: A Case Study of BAIF (India)

Abstract

Exploring the markets in developing nations, as a business opportunity, has become attractive to multinational enterprises (MNEs) in recent years. This chapter connects the “base of the pyramid” (BOP) perspective with a case study of one of India’s oldest nongovernmental organization’s (NGO) attempts to accessing global customers and markets via e-commerce. It contributes to the nascent literature about the experience of grass-root-level organizations in using technology to seek global consumers. The chapter uses the backdrop of the booming Chinese and Indian e-commerce industries to present its point of view through a model that presents the inter-linkages among the MNEs operating in international markets and the developing economies.

Source: Department of Industrial Policy & Promotion, Government of India (www.dipp.nic.in). The term “e-commerce” is used to describe the sale or purchase of goods and services conducted over network of computers or TV channels by methods specifically designed for the purpose. Even though goods and services are ordered electronically, payments or delivery of goods and services need not be conducted online. E-commerce transactions can be between businesses, households, individuals, governments, and other public or private organizations. There are numerous types of e-commerce transactions that occur online, ranging from sale of clothes, shoes, books, and so on to services such as airline tickets or making hotel bookings.

Appendices

Appendix 20.1: List of Abbreviations

APL	Above poverty line
BPL	Below poverty line
CBO	Community-based organizations
CRP	Community resource person
CSR	Corporate social responsibility
FGDs	Focus group discussions
FDI	Foreign direct investment
FMCG	Fast moving consumer goods
GP	Gram Panchayat (Village-level governing body)
GDP	Gross domestic product
INR	Indian rupee
HACCP	Hazard analysis and critical control point
ICT	Information and communication technology
LWE	Left wing extremist affected areas
MFI	Microfinance institution
MNEs	Multinational enterprises
NABARD	National Bank for Agriculture and Rural Development
NGOs	Nongovernment organization
NRLM	National rural livelihood mission
NA	Not applicable
OBC	Other backward castes
RRB	Regional rural banks
SHG	Self-help groups
SHPIs	Self-help promoting institutions
SGSY	Swaranjayanti Gram SwarozgarYojana
TAT	Turn-around times (response time)
WRT	With respect to

Appendix 20.2: About BAIF Development Research Foundation

BAIF Development Research Foundation (formerly registered as the Bharatiya Agro Industries Foundation), is a reputed voluntary organization established in 1967 by Dr. Manibhai Desai, a disciple of Mahatma Gandhi, at Urulikanchan, near Pune to promote sustainable livelihood in Rural India.

The original name Bharatiya Agro Industries Foundation (BAIF) also reflects the need for treating agriculture and rural development as an industry, requiring sound back up of management and motivation to turn the farmers into entrepreneurs to manage their resources, while generating gainful self-employment in their own environs.

BAIF is committed to provide sustainable livelihood to the rural poor through management of natural resources and promotion of livestock development, watershed development and agri-horti-forestry as major income generation activities.

BAIF is serving over 4.5 million poor families living in 60,000 villages spread over 16 states across the country through the dedicated efforts of over 4500 employees.

The major activities of BAIF are promotion of:

• Dairy husbandry,

• Goat husbandry,

• Water resources development,

• Sustainable agriculture,

• Agri-horti-forestry for rehabilitation of tribes on degraded lands,

• And various rural non-farm activities for generating employment for landless families.

Environmental sustainability and empowerment of women cut across all these programs.

Few of the Awards and Recognition bestowed on BAIF are as follows:

• India NGO Award 2008 for demonstrating sustainable development, efficient and transparent management

• Indian Innovation Award 2005 for innovative approaches in poverty alleviation

• Vasantrao Naik Jala Samvardhan Award 2005 for innovative approach in watershed development

• Centre of Excellence in Tribal Development by the Ministry of Tribal Affairs, Government of India

• Ministry of Finance, Government of India under section 35 (1) (ii) of the Income Tax Act, 1961 for carrying out Scientific Research

• SILK MARK Certification for promotion of sericulture

*(the exhaustive list of BAIF achievements could be found at: http://www.baif.org.in/about_us_about_baif.asp )

About Producer Company: VAPCOL

Having realized the need to ensure sustainability of the development programs through promotion of people’s organizations, BAIF facilitated farmers to form primary producer groups/farmer interest groups, such as cooperative societies, farmer associations, and Self-Help Groups (SHGs) federations. Eventually, this collective action gave rise to a federal structure, VAPCOL.

VAPCOL was registered as a Producer Company under Companies Act, 1956 in July 2004. The company extends various support services to its member organizations based at Gujarat, Maharashtra, Rajasthan, and other states in India; some of them are registered bodies under the Cooperative Act of concerned states legislation and some are federated informal groups.

VAPCOL supports its member organizations in providing them with a range of services such as:

• 1. Establishing market linkages

• 2. Sourcing and making available working capital to its member organizations

• 3. Advisory and capacity building support for member activities

• 4. Piloting new technologies/techniques-based services

• 5. Promoting member organizations to introduce new and continuous member services

The company marketed processed products under the brand, “Vrindavan—from the roots of India”. Today VAPCOL boasts of a total institutional membership base of 55 organizations; each of its member’s member base is (approx.) 1500–2000 farmers. Thus, through the market linkage initiatives of VAPCOL, the company is able to provide higher bargain and returns to the primary producers at the right time and also at the farm gate. Small and marginal tribal farmers of the operational area (South Gujarat, Maharashtra, and Rajasthan) of the Producer Company today have choice of more than one buyer and market to choose from. USP of VAPCOL is providing best quality products to its consumers, without the involvement of any intermediary or agents.

The range of value-added products of Cashew, Mango, Karvanda, and Amla with VAPCOL is as listed below:

List of products with VAPCOL
#	Product name	Available packing
1	Mango & Mix Pickle	200 g pouch	250 g pet bottle	400 g pet bottle	1 kg pet bottle	5 kg × 4 jar
2	Lemon, Karvanda, & Chilly Pickle	200 g pouch	250 g pet bottle	400 g pet bottle	1 kg pet bottle	5 kg × 4 jar
3	Sweet Mango Pickle	200 g pouch	250 g pet bottle	500 g pet bottle	1 kg pet bottle	5 kg× 4 jar
4	Sweet lemon Pickle	200 g pouch	250 g pet bottle	500 g pet bottle	1 kg pet bottle	5 kg × 4 jar
5	Mango Chhunda	200 g pouch	250 g pet bottle	500 g pet bottle	1 kg pet bottle	5 kg × 4 jar
6	Methiya Pickle	200 g pouch	250 g pet bottle	400 g pet bottle	1 kg pet bottle	5 kg × 4 jar
7	Mango Slices	100 g pouch
8	Mango Crush	700 ml pet bottle
9	Strawberry Crush	700 ml pet bottle
10	Amla Syrup	700 ml pet bottle
11	Kokum Syrup	700 ml pet bottle
12	Amla Juice	700 ml pet bottle
13	Mix Fruit Jam	500 g bottle
14	Mango Jam	500 g bottle
15	Strawberry Jam	500 g bottle
16	Amla Candy	100 g pouch	200 g pouch
17	Kesar Mango Pulp	850 g tin	3.1 kg tin
18	Alphanso Mango Pulp	850 g tin	100 gm pouch