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The BOP business news from India brings readers updates on three firms whose names ought to ring a bell - Arvind, Hindustan Lever, and ITC. All three were featured in "The Fortune at the Bottom of the Pyramid" and have been the subject of case studies, speeches, articles, and much more. And now, thanks to the Indian business press, we hear about their continuing push down market.

First there's an update on Arvind Mills, the company behind Ruf & Tuf jeans and other BOP-friendly consumer products. In Prahalad and Hart's original s+b article, they describe how the company moved strategically into a new market:

Arvind Mills has introduced an entirely new delivery system for blue jeans. Arvind, the world’s fifth-largest denim manufacturer, found Indian domestic denim sales limited. At $40 to $60 a pair, the jeans were not affordable to the masses, and the existing distribution system reached only a few towns and villages. So Arvind introduced Ruf & Tuf jeans, a ready-to-make kit of jeans components (denim, zipper, rivets, and a patch) priced at about $6. Kits were distributed through a network of thousands of local taoilors, many in small rural towns and villages, whose self-interest motivated them to market the kits extensively. Ruf & Tuf jeans are now the largest-selling jeans in India, easily surpassing Levi’s and other brands from the U.S. and Europe.

Now Arvind has entered into a joint venture with the U.S.-based VF Corporation in order to better market VF’s branded apparel to India. In my opinion, VF probably wants to bring Arvind on board because they’ve demonstrated success in reaching the BOP. VF doesn’t want to miss out on the market, but they aren’t sure how to reach it. A perfect reason to partner.

The second update is about Hindustan Lever Limited (HLL), whose Project Shakti sets up small enterprises selling health and hygiene products. The company recently announced its expansion plans:

To support Project Shakti, we are now launching value-added services in rural belts. With Shakti Vanis, we are educating villagers on health and hygiene. Also, we are running campaigns on ORS (Oral Rehydration Solutions) in villages. As part of the strategy, HLL has tied up with [the] Scojo Foundation to offer spectacles to villagers at low price points... With this, Project Shakti will be operational across all states in India. The company also plans to cover 500,000 villages with 100,000 Shakti Ammas (women entrepreneurs) in the next two years.

Finally, ITC announced plans to further expand its eChoupal system. Through the Choupals (meeting place in Hindi), rural farmers learn management techniques, order fertilizer and other supplies less expensively, check market prices, and sell products online. As a result, earnings have increased up to 20 percent. Like Hindustan Lever, ITC plans to further expand:

ITC Ltd is also planning to set up 50 Choupal Sagars (rural super stores) by the end of this fiscal year. This is in addition to the existing network of 5200 choupals in 31,000 villages that serve 3.5 million farmers.

Blogging to wrap up a lazy Sunday evening on a beautiful Labor Day weekend (post Ernesto that is).  Lotus Quimica- this week's featured company is an interesting case- they also tackle the water issues I touched on earlier in the week, although at first I was a bit aprehensive about their solution.

See, Brazil has a fairly intense dry season in which the available water in lakes and reservoirs can drop dramatically, leaving those that rely on these sources in a perilous situation.  The founder of Lotus, a chemist, actually discovered a product that reduces evaporation from these bodies of water by 50%.  This works via hydrophillic and hydrophobic properties of the chemical Lotus produces.

At first glance, it seems somewhat questionable- interfering with a natural process in such a way.  Lotus' founder, Marcos Gugliotti, understood that many potential clients would share the same concern, so he has gone to lengths to receive government approval- Brazil's International Institute of Ecology has said that the powder is non-toxic and does not significantly affect the natural cycle. 

This seems almost too good to be true- a safe, chemical solution to water shortages due to high temperatures, but Lotus seems to have a promising product.  To learn more about this innovative company, read the profile based on Kelly Desy's interview.  And if you're in the DC area, I hope you stayed drier than I did when Ernesto passed through...

I am forever humbled by the ability of those in academia to engage in and inspire catfights that rival some of the verbal battles I observed tutoring elementary school children last year. Few bring it out worse than Joseph Stiglitz, who recently released his new book Making Globalization Work, the follow-up to his fiery denunciation of the Washington Consensus brand of economic liberalization in Globalization and its Discontents.

Stephen Kotkin of the NY Times wins the award for bad kitty scratch: “If a prize in politics were awarded for self-righteousness, Joseph E. Stiglitz, despite stiff competition, might be near the top of the list.” The Economist jumps into the fray, criticizing Stiglitz for having solid writing but offering vague and unexplained solutions.

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The Business in Development Challenge, the world’s first international business plan competition for poverty reduction and profit, is taking place this week in Amsterdam. Hundreds of entrepreneurs, investors, NGOs, and government representatives have gathered on the eve of tomorrow’s award ceremony, when a 150,000 Euro prize pool will be divided among 15 or so winners.

The BiD Challenge is the product of a partnership between the Dutch bi-lateral development agency, NCDO, and a local NGO named Fair Ventures. Their goal is simple: generate jobs and incomes by boosting small enterprises in developing countries. What’s unique about the BiD Challenge is that it combines a business plan competition with a charitable award – a hybrid financing scheme that attracts both corporate and NGO interest.

Of 903 initial applicants, the pool has been whittled down to 25 finalists; about fifteen of them will split the 150,000 Euro prize pool. Winners will be announced tomorrow; prior to the awards ceremony, finalists will have the chance to pitch their business plans to investors during a large venture fair.

The BiD Challenge is the ultimate partnership – it bridges the government, NGO, and corporate worlds relatively seamlessly. Each participant has a clearly defined role, and acts in its own best interests: government funds projects that have been vetted by experts; NGOs highlight the importance of small-scale enterprise; corporations and investors see the next wave of BOP innovations and invest in the best models. Everyone wins, right?

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A Special on small and medium sized enterprises (SMEs) by the South Asia based Financial Express explores various angles of the evolving SME development movement from the very heart of the original microfinance revolution: Bangladesh. Once you start really paying attention to development trends, it’s amazing to see how one new focus can receive little to no attention and then within a span of years, emerge out of the dust as the next ‘big thing’- all of a sudden 2005 is the year of microfinance. In researching an upcoming overview on SMEs and their role in sustainable development for the Earthtrends project, I have observed something similar happening with the small business sector (not to be confused with microenterprise).

If you begin to research reports and policy papers on these businesses, which are generally defined as having between 5 and 100 employees, you see a burst of new information from the very late 1990s onward. It appears from this Financial Express spread that the government of Bangladesh is moving from policy proposals to real action- just on the heels of the Grameen Bank and other initiatives in earlier years.

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As Labor Day came and went in the United States over the weekend, style-conscious clotheshorses put away their whites in favor of browns, greens, and greys; community pools closed their gates; barbeque grills were sheathed for the season. All are signs that summer has come and gone. We at NextBillion must add a final sign - the departure of our trusty summer intern, Ethan Arpi.

Ethan joined our team in June, contributing news and blog posts and plenty of analysis. Readers have enjoyed Ethan's focus on Latin America, the culture of the BOP, and all things sustainable. While he will be missed by NextBillion readers and by our staff, he hasn't gone far - Ethan's taken a fresh internship with the World Resources Report, WRI's flagship publication.

Good luck at WRR, Ethan, and we hope you'll contribute some guest content from time to time.

Everyone agrees that microfinance is the coolest thing since sliced bread.  That’s why in the last two months we’ve seen it covered by the Financial Times, Reuters, The Globalist, The New York Times, The Economist, The LA Times, Business Week, CNN, and The Times of London.  And in all likelihood there are other articles still hovering beneath our radar. 

I must confess that at first I was excited to see the mainstream media weighing in on development issues affecting the base of the economic pyramid.  I held the opinion that microfinance articles—no matter how repetitive and formulaic—attract publicity to an important cause that draws less attention than Paris Hilton’s latest sexcapade.  But I’ve changed my mind.

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There is a poignant article in today's New York Times on the alarming rate of suicides amongst India's farmers - more than 17,000 in 2003. Tracing the causes of this epidemic, the article explores a confluence of forces from moneylenders to American multinationals selling genetically modified seed. An excellent article, recommended reading and, in my opinion, an important counterbalance to our frequent praise of market driven development.

“It makes good journalistic fodder, but it’s just the same story over and over!” This was fellow blogger Rob Katz’s comment when I called him about posting a story on the Strappity-do-da company. His frustration was similar to that expressed by Ethan when he complained about journalists covering essentially the same microfinance storyline instead of getting to real scalable models at the BOP. So what was the problem with Strappity-do-da, an enterprise that sells beaded bra straps sourced from a group of women in Colombia with handicraft skills?

“I’m tired of hearing feel-good stories about Americans traveling to a country, finding a community that produces a random handmade item, and selling them to their wealthy friends… it makes for a good human interest piece, and it’s great that they’re doing that, but it’s not a solution.” Rob continued ranting before slamming the phone. Okay so he didn’t slam the phone- and he doesn’t talk like that either, being a level-headed economist-type. I used some rhetorical flourish there.

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Most people steeped in the development field see the term developing countries as negative and passé; we call the up and coming global presence of countries like China, Brazil and Indonesia “emerging economies.” This term is not about being PC, it’s about accuracy and according to the Economist (subscription), these countries have really been living up to that title of late.

The magazine reports on the record growth and mainstream investment flowing into countries once unfairly stereotyped as having backward economies with poor management. Take the example of India, which has recently gotten a significant amount of attention over the vast sums of money being moved into the country.

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