Everybody in the world shops, but for some the experience is very different than for others. In Denver when I shop for a nice cut of meat to serve for company, the place where I shop looks something like this.
In rural Kenya, when a family is able to afford some meat for dinner, the place they shop looks more like this.
The Walmart or King Soopers or Whole Foods equivalent for the 2.6 billion people in the world who live on less than two dollars a day is the small mom-and-pop village shop which sells bananas, cigarettes, matches, cookies, candies, small packets of spices, cheap flashlights, chilled coke or Pepsi if electricity is available, and a variety of other consumable goods.
I’ve talked to a lot of these small shopkeepers and I find them fascinating.
A family usually starts out by buying some soap and bananas and offering them for sale out of their house by opening a shuttered window to the public.
This morphs into a small shuttered 10’x15’ shop, which earns bottom line income of two to four dollars a day, in which all the family participates. In total, there must be tens of millions of them-I don’t think anybody has counted.
The interesting thing is that commercial distribution to these small shops is still in its infancy. Shopkeepers I talked to in rural Orissa, in Eastern India, told me that they are visited by soda pop distributors- one distributor provides all the varieties available, including Coca cola, Pepsi, ThumsUp, Fanta, and locally produced small plastic sachets of drinking water. A typical shop sells 24 bottles of chilled pop a day during hot weather at 10 rupees a bottle (about 22 cents) on which the shopkeeper earns a margin of 1 Rupee (2.2 cents). Another distributor brings candies and cookies. All told, commercial distributors bring only about a third of the products that each shopkeeper sells. The shopkeeper barters with customers for products like bananas or rice and goes to the wholesale market in the nearest town to buy the rest of what he puts on the shelf.
All told, commercial distributors bring only about a third of the products that each shopkeeper sells. The shopkeeper barters with customers for products like bananas or rice and goes to the wholesale market in the nearest town to buy the rest of what he puts on the shelf.
Think what could happen if a Tata or a Walmart would do a serious study of the current shelf space of these mom and pop stores.
They could create a whole new line of attractive affordable consumer goods delivered by an efficient last mile supply chain. This would bring new prosperity to rural villages, remarkable public relations with a whole new generation of customers and attractive bottom line profits to the company with the courage to give it a try!
My dream is that Windhorse International, the private company I have started, will end up with branded shelf space in a million of these small shops all over the world, much like Coke or Pepsi has soda pop dispensers in 7-eleven stores.
This will be the ultimate last mile supply chain, with a value beyond price.
