October 28, 2009 — 09:08 am
Match Point: How to Reach Rural Markets
Editor's Note: This post first appeared in the India Development Blog.
Question: Which manufactured consumer product has the deepest market penetration in rural India?
Answer: Matches
In fact, 97% of rural households purchase matches on a monthly basis. Matches are a unique product because of their high, constant demand and low price point.Their ubiquitous presence provides fascinating insights into India's rural distribution networks, and offer potential ways to inform and interact with India's relatively untouched market.
Several innovative businesses with rural focus have floundered because either their message or their products failed to reach the end-user. One of the largest barriers to introducing new products into rural markets is the lack of reliable distribution channels. Matches, however, have probably the most pervasive distribution network of any manufactured consumer product in India; they find their way to every village and nearly every household, regardless of how remote or how poor.
What is more interesting is that most of India's matches are manufactured in southern Tamil Nadu, and are sold as far away as Jammu and Kashmir. To understand match distribution in India is to understand India's most basic, underlying distribution system. How do they reach the end-user? How many distributors do they go through? How long does it take? How much margin is added to the price of the box of matches each time it exchanges hands? Understanding how matches reach the rural consumers from Kashmir to Kerala can provide valuable insights for scaling up other products and services.
Matchbox distribution can be relevant for product piggybacking, whereby manufacturers hitch a new product to established distribution channels.Piggybacking is becoming an increasingly common way to deliver products and services to the base of the pyramid, allowing for a broader reach in rural areas at a reduced cost. Are there any products or services that can piggyback on matches?
In remote rural communities, where television, radio or even street names are almost non-existent, relaying information is a pressing issue. Matchboxes may contain the solution. The typical designs on most matchboxes in India show only the manufacturer's logo and some text about the contents. What if that space was used to relay information? Imagine the possibilities of spreading new health/educational information or advertising to 97% of rural families on a monthly basis. Simple pictorial designs would pique interest and accommodate India's vast differences in literacy rates and languages. Awareness of important topics such as the installation of chimneys to reduce smoke inhalation or cleaning and covering water containers to prevent stomach ailments could be spread to households across India, and potentially save lives.
Matches' universal presence in rural villages provides unique opportunities to reach and interact with India's underserved market. By tracking their distribution from manufacturer to end-user, we can assess the potential for piggybacking additional products and for designing innovative messaging of crucial information. Sometimes, taking a closer look at even mundane objects can spark innovative solutions and approaches to serious challenges.
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Comments
sj
Oct 29, 2009
Nice
Good observation!
David Zetland
Oct 29, 2009
Excellent example of distributing information!
Even better, those matchbooks go to women. Putting illiteracy aside for the moment, it's a great way to remind people of good ideas (wash hands) or spread new ones (go get vaccine...)
Bob Knaus
Oct 29, 2009
End-run the salt monopoly
Lace the matchsticks with iodine, then put pictures on the cover of families happily chewing on matchsticks. This would get around the refusal of Indian salt manufacturers to iodize their salt, preventing untold cases of goiter and low intelligence.
Or is this a problem that's been fixed by now? My info about the iodine problem is a few years old.
davidc
Oct 29, 2009
Maths games
MAtches are a major part of maths games like Nim or dots and boxes. If you could put the rules on the side in pictorial form you would introduce a powerful intellectual challenge to many people
Chris Grayson
Oct 30, 2009
Excellent Insight
This is a really brilliant. Great comments as well. Someone will/should use this insight as a communications channel -- A public service message on one side and the other side for an advertisement that could subsidize the cost of the matchbooks so they could be distributed for free.
[This article was brought to my attention by Benjamin Palmer of The Barbarian Group (through his Tumblr feed on his Facebook page) and I just shared it on Twitter.]
Anay Shah - D.light Design
Nov 2, 2009
Piggybacking products
Great post! As a product company looking at innovative ways to distribute a new product (and concept) to the rural market, there certainly is a lot to learn from the match distribution. It might be hard for D.light to piggyback solar lanterns on matchboxes but its worth exploring and applying the learning to other products worth piggybacking on.
Question remains, where does one get the answers to some of the good questions you raised about the margins and movement with in the match distribution?
Richard Woodbridge
Nov 3, 2009
Follow-up & Response to Comments
I have really enjoyed reading everybody’s responses on this topic.
I got the idea while analyzing India’s 2004-05 National Sample Survey Consumer Expenditure data for a project I was working on. According to the data, approximately 1.3 BILLION boxes of matches are purchased in rural India on a monthly basis.
@Chris, I like your idea of having the public service message subsidized by advertising on the reverse side.
@David & @Bob, interesting thoughts about piggybacking medical/hygiene information or even medicines themselves with the matches.
As of now, I do not have any further insights on the match distribution network. Tracing the network would probably require first, identifying a handful of brands and their places of origin. Second, tracking their distribution from both ends of the supply chain (manufacturers could provide information about their buyers, and shop owners could provide information about their supplier). Then it is a task of connecting the middlemen, tracking quantities, price and contacts.
Currently, I am unaware of anyone tracking this information or making it public. It may be that the manufacturers have no control over where their products end up going. I hope further investigation of it will uncover critical rural distribution nodes throughout the country which could be used as market insertion points for new products. Any thoughts on this?
One potential test would be to partner with a match manufacturer and have them print a new logo. Then, with the help of field researchers, time how long it takes between the first bulk sale and when the matches start showing up in rural shops. I also think it would be a fun, thought-provoking challenge for design firms and students to try and create effective public service messaging that fits on the back of a matchbox.
By the way, I found a great photo album of Indian matchboxes by Matt Lee. It’s worth a look: http://www.matt-lee.com/index.php?/photos/indian-matchboxes/
Justin DeKoszmovszky
Nov 9, 2009
Pull not Push
Great post and comments. I didn't have matches in my list of successful BoP products but right you are!
The key to match distribution (and every other very successful product reaching lower income consumers) is two-fold: consumer PULL and MARGIN structure. Knowing how matches get from factory to home would be interesting but isn't something we can replicate without creating consumer demand and a margin structure where everybody is making money.
Hanuman Tripathi
Jan 25, 2010
Good one to try to!
It seems a fantastic way to reach masses in rural areas in an cost effective way.
maverick ghadge
Feb 8, 2010
have been thinking about this for last 3yrs..
i think the idea is workable......with a few big challenges other than knowing when and where the match boxes reach.
I won't mind discussing these with you, I am reachable on vijay4275@yahoo.com....
best regards
vijay ghadge
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