News from 2020-12-03 / DEG

Fixing broken supply chains - DEG finances Indian tech start-up

Many businesses and non-governmental organisations focus on affordable life-changing technologies and products for low-income households in developing countries. However, many of these products never make it into the hands of the people for whom they have been designed. The problem: In many cases the end consumers do not know that these products exist at all or they don’t know where to get them.

The Indian start-up Essmart is helping to change this problem. Its last-mile-distribution network sets in where traditional transportation lines end. The company distributes life-enhancing products such as solar home systems, affordable glasses, hygiene items, water filters and organic fertiliser from the producers directly to local retail shops in rural southern India. DEG is now co-financing the further extension of Essmart’s business activities using funds from its Up-scaling programme. Essmart itself invests USD 260,000 and DEG added a further EUR 230,000. The company plans to use these funds to expand its distribution centres in rural southern India. Currently, the company is active in three provinces and plans to expand its operations to five provinces next year. Back in 2018, DEG already provided Essmart with USD 590,000 from its Up-scaling programme.

Network of 2,800 retail shops impacting more than 600,000 people

“Our distribution network enables local retail shops to improve access to life-changing products for their villages, while at the same time differentiating their own product range and achieving higher margins,” says Jackie Stenson, co-founder and Executive Chair at Essmart.

“DEG has been instrumental in helping us to expand our business and is always at our side providing support and advice,” said Prashanth Venkataramana, CEO at Essmart.

Digitally managed supply chains

Essmart developed its own application called ELSA, which helps managing the supply chains by connecting producers, shopkeepers and consumers. It can be used to place and track orders, to make payment transactions and even to process returns and warranty claims. Thanks to this digitalised supply chain goods can be delivered to rural regions, including in outlying areas.

Even in times of COVID-19 and the nationwide lockdown imposed in India Essmart was able to continue its operations and even to grow further. At the moment, local retailers are more important than ever in rural areas, where people depend on local shops to access essential supplies.

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