There are so many ways to determine if a company is innovative. For some, innovative companies can be new entrants that serve previously unmet needs. For others, they are those that introduce revolutionary solutions to relevant issues. They can also be businesses who use strategic weapons such as technology, design or sustainability to create an impact. These are all in various lists of top innovative companies that aim to help underserved niche markets. What’s interesting is that an in-depth look at such lists would reveal that most of the businesses focus on similar market segments. There are also companies that innovate differently. Such bold businesses target underserved markets instead.
Understanding Underserved Markets
As mentioned, most corporate innovations focus on markets with certain similarities. First, there are minimal logistical challenges. Then there are consistent business models in the same competitive sphere. Lastly, they return a timely profit greater or equal to other investments.
Social entrepreneur David Green sums it up.
Meanwhile, underserved markets present greater challenges. Consumers in such markets face often overlooked issues. Resources are insufficient. Outcomes are not always predictable. For top innovative companies in this space, these challenges are opportunities. Their measures for success deviate from usual practices. Human capital impact comes first. On top of that, they are still able to find ways to achieve business goals.
Improving Lives through Value Creation
One of the most underserved markets are the poor. Worldwide, 3.4 billion people struggle to meet basic needs. Seventy-eight percent live in rural areas. Most of them lack access to water and electricity. They are vulnerable to disease, injury and natural disaster. Illiteracy prevails. Normally, it’s up to governments to address these issues. But in some countries, authorities lack the ability to raise living standards. Reasons may include insufficient funds, logistic obstacles or political conflict, among others. These factors contribute to why a number of top innovative companies focus on markets with fewer risks.
But over the years, businesses have realized that meeting social needs and building profits don’t need to be mutually exclusive. In fact, this notion has been around since the early 2000s.
A book called “”The Fortune at the Bottom of the Pyramid” proposed that four billion people earning less than $1,500 a year represented a $5 trillion global market. While individual incomes in underserved markets are low, the aggregate buying power of communities is large.
Companies that cater to underserved markets like the poor thrive because their customers have a profound appreciation for their products and services. The solutions they offer have an immediate impact on pressing needs, and they make lives better.
Top Innovative Companies Addressing the Living Infrastructure of the Poor
Underserved niche markets that face poverty allow entrepreneurs to apply their expertise in solving a wide range of problems. One of these problems is the shortage of infrastructure that provides power and water. Below are businesses addressing this need through their innovations:
Mera Gao Power – DC Microgrids with Joint Liability Payment Scheme
Mera Gao caters to communities off the electricity grid in India. The company encourages homeowners to switch from kerosene lighting to electricity through DC microgrids. Mera Gao offers its products not just to a single household at a time. When service begins, buyers pay into a Joint Liability Group which then pays Mera Gao Power. It eliminates individual collection and billing. As a result, the model reduces risk and makes revenue predictable. Mera Gao also lowers provisioning costs by employing local labor in India’s underserved markets.
Pawame – Solar Kits for the Rural Home
Pawame provides individual solar home electricity solutions. It caters to homeowners in underserved markets in Sub-Saharan Africa. The company developed a DIY solar kit to replace kerosene lighting. It also lowers the cost of charging mobile phones. In addition, Pawame’s solar kit eliminates any transmission costs typically associated with distributing electricity. Customers access a platform called PAYGO to activate the kits and make payments.
Swajal – Supplying Water ATMs
Swajal’s business model responds to the needs of underserved niche markets facing water scarcity. The company provides clean water using off-grid renewable energy. Its distribution system involves placing dispensers in popular locations. These dispensers use RFID smart cards and accept mobile payment. The model closely resembles high-tech vending machines. Swajal is also starting a home delivery, a subscription service accessible via smartphones. It allows consumers to get last mile servicing for their water needs.
Watergen – Extracting and Distilling Water from Air
Watergen is an Israeli company that manufactures Atmospheric Water Generator (AWG). It gets water from the air then distills and distributes it. The units can generate up to 5000 liters of clean water per day. They are also modular and can run as water farms. The extraction and distillation processes are proprietary. In addition, energy consumption is considerably lower than that of other solutions. Watergen’s initial offerings are large-scale. Individual consumers will not be able to purchase them. The company is currently working on producing smaller units for homes and small offices. Using air instead of groundwater is rare, making Watergen one of the top innovative companies in this space.
Sustaining Growth and Advancing Progress by Serving Underserved Niche Markets
The top innovative companies highlighted here range greatly in size. What they have in common is the impact they have on the poor. If these businesses succeed, others are likely to follow suit. Competition means more options would be available to consumers in underserved markets. It would also lead to more innovations as companies vie for market share. It may take several years, but the possibilities are encouraging. Certainly, these companies will need to find ways to sustain growth.
Moreover, if more businesses cater to underserved markets such as the poor, they have the potential to spark transformation. They can significantly contribute to the progress of poverty reduction. Most of all, they prove that business can make lives better.