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ChanderiyaanProjectCS:Layout 1 10/12/2012 5:29 PM Page 1IRMA TTI Working PaperFrom Market Separation to Market Development at Bottom of India’s Socio-Economic Pyramid:A Case Study onDigital EmpowermentFoundation’sChanderiyaan ProjectAuthors:Ramendra SinghAssistant Professor (Marketing)Indian Institute of Management, CalcuttaPratik ModiAssistant Professor (Marketing)Institute of Rural Management, AnandFrom Market Separation to Market Development at Bottom of India’s Socio-Economic PyramidA CAse study on digitAl empowerment FoundAtion’s ChAnderiyAAn projeCt1

ChanderiyaanProjectCS:Layout 1 10/12/2012 5:29 PM Page 3From Market Separation to Market Development at Bottom of India’s Socio-Economic Pyramid:A Case Study onDigital EmpowermentFoundation’sChanderiyaan ProjectFrom Market Separation to Market Development at Bottom of India’s Socio-Economic PyramidA CAse study on digitAl empowerment FoundAtion’s ChAnderiyAAn projeCt3

ChanderiyaanProjectCS:Layout 1 10/12/2012 5:29 PM Page 4Authors: RAMENDRA SINGH, IIM Calcutta & PRATIk MODI, IRMAExecutive SummaryAccording to Bartel’s (1968) proposition, absence of efficient markets may bedue to one or more of the following market separations: Spatial separation orthe physical distances between producers and consumers; Temporal separationor the time difference between production and consumption; Informationalseparation or the informational asymmetry between producers andconsumers related to products and market conditions; and Financial separationor the lack of consumers’ purchasing power when they are willingness tofulfill their needs. The presence of one or more of the above market separationsoften leads to absence of efficient markets, especially in the bottom ofthe pyramid (BOP).According to Prahalad and Hammond (2002), the bottom of the pyramid (BOP)refers to that part of the untapped markets of the world that has people livingon incomes as low as $2 a day. Constituting the BOP are almost 4 billion peopleliving primarily in Asia, Africa, and South America. In recent years, manymanagement scholars have championed the BOP as a market for firms to sell,or source their products and services from. Prahalad (2005) notes that althoughpoverty alleviation and developmental assistance has been traditionallya domain of the government and its developmental agencies the time has nowcome for the private sector to play a dominant role.Using the context of market development at BOP, we have studied the DigitalEmpowerment Foundation’s Chanderiyaan Project as a case study to understandhow the project has been able to reduce the four market separations todevelop market for Chanderi weavers in Handloom products. We used a casestudy approach to understand DEF’s Chanderiyaan initiative. Our methodologyprimarily involved collecting and analyzing secondary data, followed bysite visit/s to Chanderi, and conducting in-depth interviews of weavers, masterweavers, customers, and employees of DEF, along with non-participantobservations.We find that DEF along with MLA has been successful in reducing market separations,specially those dealing with knowledge and skills enhancement,across all the stages of the supply chain including, sourcing, manufacturing,and retailing. In the larger context, our study throws light on how non-profitorganizations like DEF can create an ecosystem of partnerships with otherNGOs such as Media Lab Asia (MLA), by working closely with Government ofIndia’s Ministry of ICT, weavers, and other stakeholders, for successfully developingmarkets at BOP.4From Market Separation to Market Development at Bottom of India’s Socio-Economic PyramidA CAse study on digitAl empowerment FoundAtion’s ChAnderiyAAn projeCt

ChanderiyaanProjectCS:Layout 1 10/12/2012 5:29 PM Page 5According to Prahalad andHammond (2002), the bottomof the pyramid (BOP) refers tothat part of the untappedmarkets of the world that haspeople living on incomes as low as $2 aday. Constituting the BOP are almost 4billion people living primarily in Asia,Africa, and South America. In recentyears, many scholars in managementhave championed the BOP as a marketfor firms to sell, or source their productsand services from. Prahalad (2005)notes that although poverty alleviationand developmental assistance has traditionallybeen the domain of the governmentand its developmentalagencies, the time has now come forprivate sector to play a dominant role.Some scholars do (karnani 2007), however,challenge the basic premise of developingBOP markets by arguing thatthe poor are likely to be exploited bycompanies trying to sell them productsor services that they might not actuallyneed. These critics also argue that tosave the poor from exploitation, giventheir vulnerabilities, the companiesshould preferably treat them as producersand source goods and services fromthem enabling incomes, thereby, andworking towards poverty alleviation.Despite merits on either side of the debateon developing BOP markets, thereare several advantages in treating thepoor as consumers as well as producers.For one thing, the poor have largelyremained absent from the market dueto the paucity of a well-functioning orefficient market. Well-functioning marketsare those in which producers andconsumers interact to successfully engagein market exchanges. The poor canbuy/sell at the informal markets of theBOP and participate in formal markets,either as consumers or as producers.Informal markets have already witnessedthe participation of the poorboth as producers and as consumers(De Soto, 2000). In the formal markets,however, the poor are generally absentin both these capacities.. In formal marketsthe BOP producers/consumers areseparated from other producers/consumersdue to several reasons includingremote location and geographicaldispersion of BOP communities, lowand volatile incomes at the BOP, andthe presence of exploitative intermediariesin the BOP. Previous research hasfound that consumers in the BOP typicallyhave low per capita incomes butare large in numbers, which makesthem an attractive market prospect(Prahalad, 2006). Moreover, poor consumers,given their awareness ofbranded goods have developed a highaspiration value for such goods thathold the promise of better quality andare symbols of participation in the market(Prahalad, 2006).Developing BOP markets (in which thepoor participate as consumers) has severalmerits. For one, the current informalmarkets at BOP would give way toa more efficient formal market leadingto a drop in prices, which indirectlyleads to higher disposable income forthe poor and an eventual increase insocial well-being. For example, an MNCpharmaceutical company intending tosell medicines for treating malaria inmalaria-infected African countrieswould benefit the local society there.The incidence of disease in the affectedBOP community would soon diminishcausing, eventually, an overall improvementin the healthcare status and socialwell-being of BOP individuals.. ThisMNC could build economies of scale toreduce prices and develop a large marketacross disparate BOP communitiesin Africa. Participation of the poor asproducers in formal markets would leadto income generation, which wouldeventually turn them into participants(consumers) in those very markets.. Themost successful example is that ofIndia’s largest tobacco company, ITC.ITC’s choupal initiative includes twoarms, e-choupal and choupal sagar.From Market Separation to Market Development at Bottom of India’s Socio-Economic PyramidA CAse study on digitAl empowerment FoundAtion’s ChAnderiyAAn projeCt5

ChanderiyaanProjectCS:Layout 1 10/12/2012 5:29 PM Page 6The e-choupal is an internet-based informationkiosk purveying updates onweather, agri-inputs, cropping patterns,and other relevant information to thesmall and marginal farmers at BOPhelping them increase their farm productivitywhile building a relationshipwith ITC as an agriculture advisor. Thefarmer who sells produce at ITC’schoupal sagar fetches a better pricecompared to one who sells to the government-ownedmandi (wholesale foodgrain market). Adjacent to grain procurementpoint is the choupal sagar retail-storewhere the farmer can go andshop using the cash that he or she acquiredfrom selling the farm produce.This choupal initiative from the ITC atBOP in India illustrates how companiescan profitably treat BOP individuals asboth producers as well as consumers.In this article we have used the Bartels’(1968) theory of market separations toargue that markets can be developed atthe bottom of the pyramid if market separationsbetween producers and consumersin the markets are reduced, ifnot removed altogether. Bartel proposedthat new markets could be developed ifthe following four kinds of market separations(between producers and consumers)were reduced:1) Spatial separation or the physicaldistances between producers andconsumers.2) Temporal separation or the time differencebetween production and consumption.3) Informational separation or the informationalasymmetry between producersand consumers related toproducts and market conditions, and4) Financial separation or the lack ofconsumers’ purchasing power whenthey are willing to fulfill their needs.Bartel also theorized that marketing iscontextualized in society and sincemembers in the society are interdependenton each other such market separationsare not sustainable. Bartel furtherargued that one of the primary roles ofmarketing is to reduce or remove theseseparations and facilitate the process ofconsumption. The nature of marketingactivities would depend, therefore,“upon the character of the market separationsfound in the particular social environment”(Bartel, 1968; p.32).We find Bartel’s theoretical perspectiveof reducing market separations for developingnew markets at BOP to be bothmanagerially and theoretically elegant.We have developed and extended thetheory to explain how Digital EmpowermentFoundation (DEF), our case organization,successfully helped to develop amarket for traditional handloom weavingproducts like saris, fabrics, and apparelsfor women at Chanderi, a village inMadhya Pradhesh’s Ashok Nagar district.We also extend the Bartel’s marketseparation perspective by exploring afifth new market separation-knowledge/capabilityseparation that isequally important for poor producers/consumers at BOP to participate in themarket, and help it to develop further.We used a case study approach to studyDEF’s Chanderiyaan initiative. Ourmethodology primarily involved collectingand analyzing secondary data, followedby site visits to Chanderi, andconducting in-depth interviews ofweavers, master weavers, customers,and employees of DEF, besides interviewingDEF founder, Mr. Osama Manzar,and Chanderiyaan project head, Mr.Shahid, and his team members. All interviewswere audio-recorded and transcribedfor analysis purposes.DEF set up Chanderi Weavers ICT ResourceCentre (CWIRC) in 2009 as aself-sufficient community informationresource center, primarily for the poorChanderi weavers to save the dying traditionalhandloom weaving art form in6From Market Separation to Market Development at Bottom of India’s Socio-Economic PyramidA CAse study on digitAl empowerment FoundAtion’s ChAnderiyAAn projeCt

ChanderiyaanProjectCS:Layout 1 10/12/2012 5:29 PM Page 7Chanderi. The primary tasks involvedskills’ enhancement in weaving and textiledesigning, which would lead to incomeenhancement and socialwell-being. The products manufacturedand sold include saris dupattas, stoles,salwar suits, tablecloth, zaris, and fabric.This process of market developmentat BOP in Chanderi (Chanderi weaversearned approximately Rs 3000 permonth or less on average) was drivenwith the larger objective of reducingtheir dependency on (often) unscrupulousmiddlemen who exploited them outof market opportunities and kept themout of market. In less than three yearsmany weaving families in Chanderi havebeen actively participating in the marketfor finished woven sarees and otherforms of Chanderi art.Our case study throws light on how nonprofitorganizations like DEF can createan ecosystem of partnerships with otherNGOs such as Media Lab Asia (MLA) byworking closely with Government ofIndia’s Ministry of ICT as well as weaversand other intermediaries as stakeholdersto successfully develop the market atBOP. To begin with, we go by the accepteddefinition of a market being anarrangement whereby buyers and sellerscan interact to determine the prices andquantities of a product or service(Samuellson & Nordhaus, 1992). Marketsessentially serve three main functions,(1) matching demand and supply (or buyers,and sellers), (2) facilitating exchangesor transactions, and (3)providing institutional infrastructure(Bakos, 1998). In the first function, identificationof buyers and sellers, matchmakingproduct offerings with needs, aswell as price discovery is important. Inthe second function, logistics, paymentmechanisms, and facilitation of creditalong with communication between buyersand sellers become important. Finally,the third function includes theenforcement of legal and regulatorymechanisms. While formal markets,achieve all three functions efficiently dueto the free flow of information betweenbuyers and sellers underdeveloped marketsface more complications as each ofthese functions may require active interventionof external agencies with themandate to ensure that the marketswork efficiently by reducing informationasymmetry in the markets. Externalagencies like NGOs are actively helpingdevelop markets in undeveloped informalmarkets in many parts of India. Onesuch NGO that we have undertaken thecase study on is DEF with its CWIRC initiativein Chanderi. To be more specific,the three functions of the market arehampered in the BOP due to constrainedphysical access of poor consumers orsellers to or from BOP areas, whichmakes logistics, distribution, and retailingan expensive proposition. Moreover,information asymmetry is rampant inBOP regions due to the widespread lackof numeracy and literacy and the prevalenceof superstitions and other culturalbeliefs, not to mention the poor marketfor education or low media penetration.The problem has been compounded bylow levels of education, scant exposure tomedia, and high levels of dependence onlocal and confined community and socialnetworks (Viswanathan & Rosa, 2007;Viswanathan, Gajendiran, & Venkatesan,2008). Due to high normative prevalenceof social, and cultural norms, the governingmechanisms are informal in natureand strongly influenced by sociopoliticalfactors such as religion and local community(Sheth, 2011), and less by legalor regulatory norms.We will now discuss in detail how DEF wentabout developing the three functions of wellfunctioningmarkets by reducing one of themost important factors of market separationin Chanderi, that of information market separation.From Market Separation to Market Development at Bottom of India’s Socio-Economic PyramidA CAse study on digitAl empowerment FoundAtion’s ChAnderiyAAn projeCt7

ChanderiyaanProjectCS:Layout 1 10/12/2012 5:29 PM Page 8In Figure 1 below, we show the four market separations, how information separation can be reduced atfour levels. We are not discussing, however, the other three market separations that are also important,although not as important as information market separation in the Chanderi case.type of Market SeparatioNStemporalSpacialinformationNature of Market SeparatioNS1st level 2nd level 3rd level 4th levellocal & homemadesolutionspoor consumersandpoor sellerslocalize productionand innovationinservicesreduce illiteracyand increaseeducation, andskillslink incomegeneration andconsumptioninvolve poorconsumers inproduction andinnovation inservicesincreaseawarenessreducewastages andstorage of productsdevelop poorpeople as localentrepreneursto develop localsolutionsBridge digitaldivide to bringinformationsymmetrylocalize productionlocalize productionAssimilationwith the market-basedsystemfinancialremovepoverty trapsand debt trapsincrease incomeof poorconsumersincrease savingsand investmentsincrease purchasingpowerFigure 1: Four market separations, and the four levels at which it operates Chanderiyaan Project fromDigital Empowerment Foundation (DEF)8From Market Separation to Market Development at Bottom of India’s Socio-Economic PyramidA CAse study on digitAl empowerment FoundAtion’s ChAnderiyAAn projeCt

ChanderiyaanProjectCS:Layout 1 10/12/2012 5:29 PM Page 9DEFis an NGO registeredunder the SocietiesRegistration Act XXIof 1980, with its own governing body,board of directors, and team members.It is headed by Mr. Osama Manzar, whofounded the NGO in 2002. DEF workswith the mission and vision of economicallyand educationally empowering thepoor people through the use of informationand communication technology,and the digital media leading to theirdigital inclusion. Since 2003, DEF hasinitiated several path-breaking projectsin diverse areas of social and economicdevelopment using ICT in some form.CWICTRC is one of the several initiatives,besides, Neerjaal, ManthanAward Ceremony for e-Content practices,and Digital Panchyat.Chanderiyaan is the brand name ofChanderi Weavers ICT Resource Centre(CWICTRC), which started in the AshokNagar district of Madhya Pradesh incollaboration with Media Labs Asia andby the support of the Ministry of Communication& Information Technology.Chanderi has a population of around30,000 (2001 census) members ofwhich a third belong to weaving communities;of these communities morethan 60 percent of the looms belong toMuslim families. Earlier the poorweavers were dependent on the latterbecause they lacked the purchasingpower to buy raw material and did notown their own looms. These weaversalso lacked the skills to create their designsor even approach customers fororders. The project primarily involvedproviding technical education to thetextile weavers leading to, in theprocess, some 30 computers centersbeing opened and run for weavers tolearn to create new designs by usingspecial software (CAD). At the sametime, DEF has also been digitally preservingold traditional handloom designsat its resource center. Weavers,with the help of printouts of designscreated by them, are putting the latterinto the loom.DEF’s Chanderiyaan project has helpeddevelop the knowledge and skills of thepoor weavers of Chanderi in severalways. The project’s activities include askill builder program, forming of selfhelpgroups, and the provision of handloomsto the poor, weavers’ blockprinting, and kalamkari. They also includemanaging the Chanderi e-Commerceportals. Another part of theChanderiyaan initiative is the ChanderiIntegrated ICT for Development Program(CIDP) through which DEF has beenpromoting entrepreneurship, healthcare,education, and tourism. Deploymentof ICT in the socialentrepreneurship program is part of theCIDP; this includes a setup for tailoring,weaving, and embroidery work requiringhardware like a plotter printer for printingChanderi sari designs at the resourcecenter. This center has, so far,trained more than 150 people in theweaving process on looms, embroiderywork, and block printing on clothes. AJacquard block-printing machine wasFrom Market Separation to Market Development at Bottom of India’s Socio-Economic PyramidA CAse study on digitAl empowerment FoundAtion’s ChAnderiyAAn projeCt9

ChanderiyaanProjectCS:Layout 1 10/12/2012 5:29 PM Page 10also procured to print weaving designson clothes. More than 90 people havebeen trained, and more than 40 studentsare currently undergoing trainingon computerized integrated embroiderydesigns providing end-to-end solutionso far, the resource centre has createdand digitally stored in their design librarymore than 3500 Chanderi designs bytraining more than 105 weavers in designmaking. more than 350 students havealso been trained in apparel designingand tailoring. Also undergoing trainingare more than 40 students in stitchingwork, and 68 students in skill builderprogram.Figure 2 below shows the various stakeholders who have worked closely with DEF on this project. Figure3 shows the CWICTRC business processes and supply chain. Figure 4 discusses how the CWICTRChas helped reduce the four market separations at BOP in Chanderi. Figure 5 discusses how DEF hasbridged market separations in Chanderi for weavers, working closely with dozens of self-help groups(SHGs) to maintain and develop the weavers’ supply chain.goals/missionstakeholdersActivitiesdesigningweavingApparelproductione-commerceAndretailsearning moneythrough sustainablelivelihoodChanderiCommunitylearning andcreating designon the computerputting thatdesign into thehandloompreparing finalproductspresent at retailshop for sellingempoweringpeople throughinformationdigitalempowermentFoundationproviding trainingfor computerizingtextiledesignsproviding rawmateriallinkagesproving spacefor stocking thefinal productselling thoughe-commerceestablishingand facilitatingiCt applicationmedia labAsiamedia lab Asia is supplying all theiCt resources– card punching machine,ChiC, CArpet and CAd software.trained 12 master designersfor helping weaversnAdeF and medialab Asia havejointly built upe-commercewebsite.promoting ofelectronics andit-it enableservice industrydepartmentofinformationtechnologygovt. of indiaproving fund and monitoring on CwiCtrC projectFigure 2: CWICTRC Stakeholders’ Activities10From Market Separation to Market Development at Bottom of India’s Socio-Economic PyramidA CAse study on digitAl empowerment FoundAtion’s ChAnderiyAAn projeCt

ChanderiyaanProjectCS:Layout 1 10/12/2012 5:29 PM Page 11Businessprocesssupply ChaininvolvementBeforeCwiCtrCAfterCwiCtrCmarketseparationsplacemp state govt.deFAt home, atshg Centreraja ranimahalspatialmoney/ Costgovt. of india& BankdeF take huge loan take less loan Financialtechnical setup mlA deF not Available Available temporallooms (handlooms)?** deF handloom handloom Financialraw materials(Cotton, silk,Zari)BFC*, meC*,sweA*deFpurchased frommaster weaverssupply by deFinformationaltraining (textile,weaving)designing oncomputermlA Both not Available Available skillmlA Both not Available Available temporalAppareldesigningmlAweavers, deF,mlA, BFCdone by owndone inCwiCtrCinformationweavingpatternmlAweavers, deF,mlA, BFCdone by owndone inCwiCtrCskillembroideryn/Aweavers, deF,mlA, BFCsent to jaipurdone inCwiCtrCskillBlock printingn/Aweavers, deF,mlA, BFCsent to jaipurdone inCwiCtrCskillFinishedproductmeC deF exhibition Via CwiCtrC skillBulk BuyermeC,exhibitionsdeF exhibition Via CwiCtrC skillretailing &marketingdeFweavers anddeFown shop athomeCwiCtrC shopinformationand Financialincome weavers increased FinancialFigure 3: CWICTRC Business Processes, and Supply Chain*BFC – Barefoot College, *MEF – Mother Earth Craft, *SESA - Self Employed Women’s Association,*DEF – Digital Empowerment FoundationFrom Market Separation to Market Development at Bottom of India’s Socio-Economic PyramidA CAse study on digitAl empowerment FoundAtion’s ChAnderiyAAn projeCt11

ChanderiyaanProjectCS:Layout 1 10/12/2012 5:29 PM Page 12stakeholdersmarketseparationspatialseparationtemporalseparationinformationalseparationFinancialseparationKnowledge/Capabilityseparation(new)ChanderiCommunitythey arepresent inretail outlet.Customers aredirectlyreaching tothemChanderiweavers areproducingapparel fasterthan everbefore. Alsotime requiredto reach thelatest designs/products tomarket isreducedsharinginformationaboutexhibitionsspending theirincomes intobuyingraw-materialshown eagernessto learnnew techniquesand skills.digitalempowermentFoundation(deF)e-Commercewebsite andretail shop inraja ranimahalintroduced iCtbased servicesmarket relatedinformationthrough thesupply chain.ex – motherCraft, BFC,sewAequally distributeprofitsamong theweaverstraining programon clothdesign, appareldesign, finishproduct designmedia labAsia (mlA)if earlier Chanderiweaverswent to otherplaces for designing,thenmlA helped toreduce theseparationCard punchingmachine, ChiC,CArpet andCAd softwaretool is helpingreduce designingtimesetting up andrunningresource center.proving fundsfor technicalset uptraining andsupply theequipments.Card punchingmachine, ChiC,CArpet andCAd software.departmentofinformationtechnologygovt. of indiano direct help, but financial support to deF and mlAgovt. of india providing fund through the deFFigure 4: CWICTRC Market Separations12From Market Separation to Market Development at Bottom of India’s Socio-Economic PyramidA CAse study on digitAl empowerment FoundAtion’s ChAnderiyAAn projeCt

ChanderiyaanProjectCS:Layout 1 10/12/2012 5:29 PM Page 13deF- shg supply Chainseparationsupply ChainhandloomssourcingrawmaterialsweaversdesigningmanufacturingweavingembroideringBlockprintingretail &marketingmarketingspatialseparationBridgingthe physicalgaps betweenlooms manufacturers& weaversBridgingthe physicalgaps betweenrawmaterialmanufacture&weaversFormedshg forworktogetherearlierweaversmight go tootherplaces forcomputerdesigntraining.now inChanderilearningnew weavingpatternsinchanderi.Bridge bydeF & mlAstartedrecently bydeFstartedrecently bydeFCreated e-commercewebsite bydeF & mlAtemporalseparationnApurchasedfrom farawaylocationthusconsumingmore timeworking togetheratone place,saving timeproductiontime reducedbydeF & mlAjaqard Cardpunchingmachinehelps reduceweavingtimestartedrecently bydeFstartedrecently bydeFBuyer canbuy productsanytime fromhome.Bridge bydeF & mlAinformationalseparationearlierweaversdidn’t knowfrom whereto buy lowpriced handloomsBridge bydeFearlierweavers didnot knowwhere tobuy lowpriced,good qualityraw materials.Bridge bydeF.deFallocateweavers towork withthem.Adopt newdesigningtechnologyAdopt newweavingpatternsstartedrecently bydeFstartedrecently bydeFsupplyingexhibitioninformationto theweavers.Bridge bydeF.Financialseparationweaversdid nothaveenoughmoney forpurchasehandlooms.Bridgingseparationsby deF.governmentfundsutilized onraw materialpurchase.Bridgingseparationsby deF.weaversnow have afixed salarywith incentiveinsufficientmoney forlearning.Bridgingseparationsby deF &mlAinsufficientmoney forlearning.Bridgingseparationsby deF &mlAinsufficientmoney fortraveling &learning.Bridgingseparationsby deF &mlAinsufficientmoney fortraveling &learning.Bridgingseparationsby deF &mlAprofit sharingwithshg. BridgingseparationsbydeF.Knowledge/Capabilityseparation(new)increaseknowledgeabout usinghand loomBecome efficientinjudging &purchasingraw material.increaseknowledgeabout newweavingpatterndesigningin computerincreasingweavers’capability.Bridgingseparationsby deF &mlAnew weavingpatternsincreasingweavers’capability.Bridge bydeF & mlAlearningnew techniqueincreasingweavers’capabilityBridgingseparationsby deF&mlAlearningnew techniqueincreasingweavers’capability.Bridgingseparationsby deFKnowledgeabout howto sellproductsFigure 5: DEF- SHG Supply ChaiFrom Market Separation to Market Development at Bottom of India’s Socio-Economic PyramidA CAse study on digitAl empowerment FoundAtion’s ChAnderiyAAn projeCt13

ChanderiyaanProjectCS:Layout 1 10/12/2012 5:29 PM Page 14Chanderiweaving communities are involved inweaving activities that pass throughsteps such as designing, weaving, apparelproduction, and e-commerce & retail,after the involvement of DEF inChanderi since 2009. The weavers’ objectiveis to earn money through sustainablelivelihood. At the designingstage the weavers learn to create newdesigns on computers at the resourcecenter (internet enabled). At the secondstage, they put those design intothe handloom for weaving. Finally, thefinal products get ready for being soldthrough retail outlets and exhibitions.DEF has a fair amount of control overall these activities. Their mission is toempower people who are engaged inthese activities by providing correct information.At the first stage DEF impartstraining to them on computerizedtextile designs. Before the weavers startactually weaving, DEF provides raw materials’linkages to them. After completionof the final products, DEF providesspace for stocking them, which it thentries to sell through its e-commercewebsite. It also encourages participationin exhibitions in nearby towns (some ofthe master weavers have their own salesteams and make trips to exhibitiontowns for one week at a stretch).Media Lab Asia is also involved in thisproject. Its objective is to establish andfacilitate ICT application. MLA is supplyingICT resources including cardpunching machine, CHIC, CARPET, andCAD software. It has trained twelvemaster designers for assisting theweavers. MLA is also attached with DEFfor building up the e-commerce website.Government of India’s motive is the promotionof IT-ITES enable service industry.To ensure the project’s success theMinistry of Information Technology hasprovided funds and is monitoring theCWIRCTRC project at every stage ofproduction as well as the attainment ofits finality in reaching it to the ultimateconsumers. Currently, the ministry ofIT is concerned with making theCWIRCTRC project sustainable so thatDEF can exit this project to concentrateon other projects and the local Chanderiweaver’s communities (many time representedby their SHGs) can take chargeof themselves.Chanderi weavers’ community removes/reduces spatial separation by participatingin exhibitions, or by selling their produceto master weavers who can thensell the same in fairs. This is a major departurefrom the past when poor weaversnot only received very low weavingcharges (much lower than the amountmandated by government), but were alsoexploited by master weavers and keptaway from the markets. Nowadays customersare able to interact with theweavers during exhibitions. Moreover,weavers are now able to produce the fabricfaster than before, which is actuallyremoves or reduces temporal separation,given the reduction in designing time andcosts, besides the weaving time. Weaversalso share information regarding differentexhibitions among themselves. ByIn fact the entire Chanderi town is wi-fi enabled by DEF, and the entire cost of accessing internet is borne byDEF (reimbursed by Deptt of ITC, Government of India), but it is free to use by localities.14From Market Separation to Market Development at Bottom of India’s Socio-Economic PyramidA CAse study on digitAl empowerment FoundAtion’s ChAnderiyAAn projeCt

ChanderiyaanProjectCS:Layout 1 10/12/2012 5:29 PM Page 15doing this they help remove/ reduce informationalseparation. They reinvesttheir profits into their business, whichmeans that financial separation also getsremoved or reduced. Weavers are alwaysaggressive towards learning- this reducesknowledge/ capability separation. For example,during the visit to the Chanderisite, the case writers met many hithertounemployed children of weavers who arenow actively engaged in some role in thesupply chain of the business with somein sales, some in designing, while othersare directly involved in weaving.DEF has also launched an e-commercewebsite [http://chanderiyaan.net/] thathas been successful in removing/ reducingspatial separation between thebuyer and the seller. DEF has also introducedICT-based services for Chanderiweavers. Introducing newtechnologies to the unpenetrated areashelps remove/ reduce temporal separation.Weavers earning more weavingcharges (when they weave for othermaster weavers) or getting more profitswhen they weave and sell directly, hasled to reduction in financial separation.DEF provides training programs oncloth design, apparel design, and finishedproduct design, which enhancesthe weavers’ knowledge-base. This how,knowledge/ capability separation getsremoved/ reduced.DEF is closely attached with SHGs thatwere formed by DEF. Working closelywith these Self-Help Groups DEF hasbeen proving them with capital. It alsohelps them manage the capital and monitorhow the capital is used in terms ofpurchasing of raw materials, payingweaving charges, and collecting themoney from the market after selling.There is also a production manager, amember of the SHG, who manages theproduction and marketing of the productsand is paid a salary from DEF. Atthe end of the year, profits generatedfrom these operations are distributedamong the SHG members. At the time ofmlA activities have also helped to remove/reduce separation. mlA, in collaborationwith de, proving iCt-basedsupport in CwiCtrC, where all theweavers are working together reducingspatial separation. mlA has also introduceda card punching machine, ChiC,CArpet and CAd software tool, which ishelping reduce designing time leading toreduction in temporal separation. the entirecost of this technical setup has beenborne by ministry of it, thus helping indirectlyreduce market separations in theChanderi market. Besides, mlA and deFare providing training and supply technicalequipments, which actually help theweavers reduce/ remove knowledge/ capabilityseparation. mlA has been instrumentalin developing, implementing, andoperating the e-health project that aimsto keep the weavers healthy at all timesand ensure that no setback occurs totheir regular incomes. mlA has also beeninstrumental in promoting tourism atChanderi by operationalizing the tourismwebsite and providing mobile-based informationto tourists.writing this case, the economy of theChanderi weavers was estimated by DEFto be approximately Rs 150 crores, ahuge leap from around Rs 70 crores inless than 3 years.Broadly speaking, there are three stagesin the supply chain- sourcing, manufacturing,and retailing. At each stage ofthe supply chain, DEF has reducedmarket separations. After DEF came toChanderi it provided over 30 handloommachines to the poorest weavers enablingthem to weave and earn a livelihood,thus reducing spatial andfinancial separations. Raw material isanother important aspect of weaving.Here DEF provides linkages, whichagain helps remove/ reduce the separations.Weavers play the main role inFrom Market Separation to Market Development at Bottom of India’s Socio-Economic PyramidA CAse study on digitAl empowerment FoundAtion’s ChAnderiyAAn projeCt15

ChanderiyaanProjectCS:Layout 1 10/12/2012 5:29 PM Page 16weaving. DEF has formed an SHG reducing,thereby, spatial separationsamong the weavers. DEF got the permissionfrom the government to use thepremises of the famous Rajarani Mahal,which is now being used by the weaversfor weaving and for training on designing.At the same place, weavers gettrained on weaving patterns and embroidery.Due to computerization of the designingprocess the estimated time hasgone down from 10-15 days (when itwas done manually) to less than a day,thanks to the card punching machine.Similarly, it took the weavers 20-25days for setting the loom for a new design,which has now reduced to lessthan 3 days.The last stage of this supply chain is retailingand marketing. Through the e-commerce website customers can nowpurchase products at any time, althoughthe website is still in its pilotstage. DEF also provides information onlow price handloom and good qualitylow price raw materials. Along with this,DEF provides training on computerizeddesign and weaving. At the end of thesupply chain, DEF provides informationon different exhibitions. All these activitieshelp reduce information separation.DEF has also tied up with garment factoriesand has been getting the weaverstrained for sewing in order to preparemanufacturing apparels in the near future.Before DEF plans to exit theecosystem it created in Chanderi, itwants it to run in a sustainable manner.For example, one of the objectives is toincrease the number of looms with poorweavers, from 30 today to almost 150 inthe near future. Other objectives includerunning IGNOU certified and DOEACCcertified courses commercially, and registeringitself with MP Tourism. If theChanderi market becomes sustainablein the medium term- two years as decidedby DEF- (the government currentlyprovides a grant of Rs 11 millionto DEF, and MLA to support the project)-then it would be a real test of marketdevelopment as a consequence ofbridging market separations.the Chanderi town is estimated to generaters 65 crores ($ 13 million) of businessannually. most weavers have admitted totheir incomes increasing from rs. 3000/-to rs. 6000/- because of the Chanderiyaanproject. moreover, the projecthas resulted in making 90% of the weaverpopulation reduce its dependence onmaster weavers (large businesspersonswho acted as intermediaries in the supplychain), thus disentangling themselvesfrom their exploitative practices.16From Market Separation to Market Development at Bottom of India’s Socio-Economic PyramidA CAse study on digitAl empowerment FoundAtion’s ChAnderiyAAn projeCt

ChanderiyaanProjectCS:Layout 1 10/12/2012 5:29 PM Page 17The public health centre in Chanderi has atele-health facility provided by DEF & MediaLab Asia. This tele-health facility was facingthe issue of internet connectivity. The ChanderiWireless project has now ensured seamlessinternet connectivity. Local doctors arenow able to connect with senior doctorsworking in district headq uarter hospitals.This has enabled doctors to send their patients’medical reports like ECG, BP, andBlood Sugar to district hospitals for referralsuggestions. Around 15-20 patients receivetele-health facility every day supported byimproved connectivity.The wireless project has contributed in generatinga design repository in Chanderi.Weavers have accessed connectivity tosource design patterns based on which newdesigns are being created. Till December2011, the design repository has more than250 new design patterns that are regularlysourced by the weavers to plant on rawwoven cloth.connected, are now utilizing the facility ofinternet for their official purpose at the DigitalPanchyat Centre. Panchayat membersare now using this facility for day-to-daywork of panchayat such as creation of onlinecontent, maintaining database of NREGA(National Rural Employment Guarantee Act)scheme, etc.It is also a part of the Chanderiyaan project.The telemedicine component works throughthe Community Health Center (CHC) atChanderi provided by the government. TheCHC operates out of a small room which hasthe complete MLA's tele-health kit and acomputer with a link to district head quarterhospital for referrals and diagnosis based onthe information of the patient sent fromlocal chanderi based hospital. This healthbasedinitiative has helped to keep theweavers at Chanderi healthy, thus ensuringa stable level of their incomes. MLA also hasled the initiatives on promoting virtualtourism, and ensuring preliminary-level designingsoftware for training and capacitybuilding.The project has resolved the issue of internetconnectivity in 13 schools, including onegirls’ school and two (2) Madarsas (IslamicEducation Centre), which never had experiencedICT lab and internet connectivity.Thus, students and teachers are now able toaccess information and knowledge for theireducation and curriculum activities. All the11 schools and 2 madrasas of chanderi arealso connected with wireless connection.Each of these have also been provided 2computers each by Chanderiyaan to developtheir ICT Lab.In Chanderi, there are 40 village councils,which have never experienced of internetAn independent project from DEF helps toprovide and enable last mile internet accessprovisioning through wireless networkingtechnologies using free spectrum. Chanderiyaanproject became the first clusterbasedproject with wireless for communityproject being tried, and tested. Today, theentire 3-5 kilometers of the Chanderi iscompletely wi-fi enabled. Any local residentcan become member of the community createdby Chanderiyaan and avail the internetconnection through wi-fi, like more than 100connections with unlimited use alreadypresent as members of the Chanderiyaancommunity. The impact of w4c project hasmade even government officials and officeswant the connection from Chanderiyaanrather than from BSNL. w4c is an uniqueproject initiated by Internet Society andDEF, where ISOC has also been contributingwith financial support.From Market Separation to Market Development at Bottom of India’s Socio-Economic PyramidA CAse study on digitAl empowerment FoundAtion’s ChAnderiyAAn projeCt17

ChanderiyaanProjectCS:Layout 1 10/12/2012 5:29 PM Page 18Bakos, Y. 1998. The emerging role of electronic marketplaces on the Internet. Communicationsof the ACM, 41(8). 35–42.Bartels, R. 1968. “The General Theory of Marketing,” Journal of Marketing (32:1), pp. 29-33.De Soto, Hornando 2000. The Mystery of Capital: Why Capitalism Triumphs in the Westand Fails Everywhere Else, New York: Basic Books.karnani, A. 2007. “The Mirage of Marketing to the Bottom of the Pyramid: How the PrivateSector can Help Alleviate Poverty,” California Management Review (49:4), pp. 90-111.Prahalad, C.k. 2005. The Fortune at the Bottom of the Pyramid: Eradicating Povertythrough Profits, Upper Saddle River, NJ: Wharton School Publishing.Prahalad, C.k., and Hammond, A. 2002. “Serving the World’s Poor, Profitably,” HarvardBusiness Review (80: 9), pp. 48-57.Samuellson, P.A., & Nordhaus, W.D. 1992. Economics (14th Ed.). New York, NY: McGraw-Hill.Sheth, J. 2011. Impact of emerging markets on marketing: Rethinking existing perspectivesand practices. Journal of Marketing, 75(4), 166–182.Viswanathan, M., Gajendiran, S., & Venkatesan, R. 2008. Enabling consumer and entrepreneurialliteracy in subsistence marketplaces. New York: Springer.Viswanathan, M., & Rosa, J.A. 2007. Product and market development for subsistence marketplaces:Consumption and entrepreneurship beyond literacy and resource barriers. InJ.A. Rosa & M. Viswanathan (Eds.), Advances in international management series (Vol. 20,pp. 1–17). Oxford: Elsevier.18From Market Separation to Market Development at Bottom of India’s Socio-Economic PyramidA CAse study on digitAl empowerment FoundAtion’s ChAnderiyAAn projeCt

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ChanderiyaanProjectCS:Layout 1 10/12/2012 5:29 PM Page 2020Institute of Rural Management AnandGujaratFrom Market Separation to Market Development at Bottom of India’s Socio-Economic PyramidA CAse study on digitAl empowerment FoundAtion’s ChAnderiyAAn projeCt