Eco capitalism in India – Time to Light the Thinking Bulb?

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There has been a lot of fuss created by all the environment enthusiasts about eco-friendly products. But (on the supply side) how often does one see a complete stack of eco-friendly products in a supermarket or a big shoppe. And (On demand side) how often does one see people using eco-friendly products over more conventional ones.

There are hundreds of SMEs and micro enterprises, both in formal and informal sector, which have been operating in eco-friendly products space for many years now. But none of them could reach a ‘Pan India’ scale or get the eye balls rolling to say the least. There may be couple of reasons,

– Most of the enterprises in informal sector suffer from lack of funds and support and absence of any viable platform to sell their products.

– In formal sector, there is a significant presence of non-profit organizations and public welfare groups. Many enterprises suffer from lack of quality products and business acumen. Others offer very mundane and limited array of products which are mostly sold at one off events.

– Those that make good quality and novel products tend to be oblivious to India market. Most of their products are priced at a very high premium and are targeted towards foreigners, NRIs or people at the upper part of pyramid.

– Some others, especially individual artists and micro enterprises leverage only e-commerce platforms (like www.shopo.in) to sell their products, thereby catering to a very small chunk of consumer population.

So it would be unfair to reason out that India is not ready for eco-friendly products adjudging that Indian consumers are very cost sensitive and environment agnostic. ‘Partial success’ of some companies proves that there is a market for eco-friendly products out there if one is able to find a niche. And if marketed and sold through suitable channels, there is a good possibility that people would pay a good price for the product.

This brings us to the essence of the discussion, what can be a likely solution which can not only enable enterprises achieve economies of scale but also help eco-capitalism kick-off.

Any likely solution should touch upon following points.

1. Collaboration: “Competition should be considered only if it is not feasible to collaborate”. There is a need for all the stakeholders involved i.e. commercial waste producers, enterprises, NGOs and informal sector to look for ways in which they can leverage each other and work in synergies rather than competing against each other.

2. Visibility among masses: The products need to be visible to a much larger audience than they are now, in order to achieve desired scale. It becomes all and more important to choose the go-to-market strategy very carefully.

3. Branding: In my view, leveraging an established brand rather than trying to create own brand, can be a better option to start with. Once the products are well entrenched in the market, it becomes a lot easier to create own brand.

4. Cost competitiveness: In order to achieve economies of scale, it is imperative to keep the premium on products well within buyers reach.

Probably the best example for aforementioned points would be Terracycle, a US based company started in early 2000s which succeeded in achieving economies of scale through collaboration with the ecosystem. The company now operates in more than 15 countries and is expected to enter Chinese and Indian market by mid-2012.

There is a need to create a vicious circle of waste in the ecosystem, wherein people realize the value in waste and become a crucial part of the value chain; not only as consumers but also as resources, thereby beefing up company’s bottom as well as top line. It is only when people change their perception about waste, can there a larger change in the society be brought, and that is what any enterprise in eco-friendly space should be looking at.

[Guest article contributed by Ashutosh Garg.]

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