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Which is tougher? Digitizing a fast paced client items (FMCG) or an agricultural worth chain in growing international locations?
Though the FMGC worth chain might be extra advanced (extra hyperlinks, much less visibility), a big a part of it’s in city areas the place the digital monetary providers (DFS) ecosystem is extra developed. Alternatively, although agricultural worth chains are in rural areas with much less developed digital infrastructure, these worth chains are usually a bit shorter, with fewer members.
Whereas there are lots of research on digitizing the agricultural worth chain with cellular cash, there are fewer on FMCG chains. There may be even much less work accomplished on making certain that these efforts are tailor-made to girls. In an try to shut this information hole, Girls’s World Banking is sharing a few of our learnings from current work digitizing an FMCG worth chain in Nigeria, funded by Monetary Sector Deepening Africa by UKaid from the British individuals.
The drive to digitize
Digitizing worth chains has been a spotlight of many organizations of late, given the disruptive affect digital know-how has had on each degree and sort of trade. The advantages are monumental, from extra visibility alongside the worth chain and operational efficiencies for firms to elevated entry to handy, time saving monetary providers for people, to not point out progress in monetary inclusion. Specializing in making certain the worth chain works for girls makes worth chains extra inclusive as nicely, as a result of in lots of industries, girls are on the backside of this chain.
Fundamentals first
When deciding to digitize any worth chain, the primary prerequisite is a mature DFS market with a developed DFS ecosystem. What’s true for FMCG in city areas is even more true for agricultural worth chains: “The general lack of cellular cash ecosystems in rural areas, even in international locations with probably the most developed digital monetary service ecosystems, provides farmers little incentive to modify from money to digital funds.”[1]
In different phrases: if the market lacks a well-developed DFS ecosystem and easy-to-use providers that reveal clear advantages over money, attempting to digitize a worth chain can be a close to not possible activity. Additional, as girls the world over are much less doubtless than males to have entry to cell phones[2], a really inclusive digital worth chain must get inventive in figuring out entry factors which might be simple for girls to succeed in. Alternatively, if a DFS ecosystem exists, now we’re “cooking with fuel,” because the expression goes.
Newbies don’t make nice recruiters…
We can not count on somebody to be taught and train a brand new habits concurrently. Asking an FMCG worth chain participant to turn out to be an agent and then recruit and train her clients to turn out to be DFS customers could also be tough particularly if the agent-to-be has not used the service beforehand.
…however acquainted faces do!
Utilizing gross sales brokers that FMCG worth chain members already know to introduce the service is very efficient in changing to utilization. A stranger—usually the cellular cash commerce improvement consultant (TDR)—attempting to clarify how or why to make use of a brand new cost technique whereas the participant is busy in her store, is sort of ineffective.
Nonetheless, FMCG representatives might also not be outfitted to clarify the service nicely to the shopper. A more practical technique is to have a well-known FMCG gross sales or advertising agent introduce the TDR to the worth chain participant. This strategy leverages the present belief between gross sales agent and worth chain participant, smoothing over apprehension or distrust a brand new face would possibly engender. That is notably essential for girls worth chain members, who’re way more conservative in attempting out new providers than males.
Give them a cause to digitize
Incentives actually work in altering habits, particularly in the event that they lead to monetary good points. They will take the type of the FMCG product which they’ll promote for revenue, or advertising merchandise equivalent to t-shirts, umbrellas, and so forth. Not surprisingly, FMCG product incentives are way more efficient as a result of it comes with the potential for extra revenue.
Digitizing a worth chain is difficult work however work price doing. I hope the following pointers make it easier to in designing an inclusive digitization resolution on your firm. If you happen to’d like to listen to extra about this challenge, tweet to me at @DianaBoncheva.
[1] www.cgap.org/weblog/sequence/digitizing-agricultural-value-chains
[2] GSMA, The Cellular Gender Hole Report 2018, https://www.gsma.com/mobilefordevelopment/programmes/connected-women/the-mobile-gender-gap-report-2018/
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