Innovation

The innovation of RML is the new business model it has created and the medium it uses. To understand the business model let us first look at the target market and how RML addresses the issues of the target market.

• Target: Indian Farmers in the rural areas
• Issues Resolved: Poor productivity of agricultural goods in India due to inefficient government policies, abysmal physical infrastructure, insufficient access to financing and property, as well as inadequate information on crop prices and weather patterns.
• Solution: Agriculture-related Information
• Medium: Mobile Phones India’s mobile market is one of the fastest growing markets in the world. The number of mobile connections today is approximately 427 million, which is much higher than the number of landline and internet subscribers. In rural India, the number of internet subscribers is even less. Similar to M-Pesa, RML has also reached out to the rural farmers using mobile phones.

The innovation serves the purpose of serving people at the Bottom of the Pyramid (BoP). It helps them to get out of poverty. It does so by the unique value chain it has. The value chain can be summarized as follows:

• Generation of Content: It is one of the core competencies of RML. It uses its own network and resources to generate most of the information. Only some information like weather reports are taken from outside resources.
• Managing the Content: RML uses advanced systems to format the content to the various platforms such as SMS/WAP.
• Marketing and Awareness: To spread the awareness among the rural farmers, it engages in marketing efforts such as banners, advertising on vehicles, and wall paintings.
• Distribution: Reaching out to the rural farmers is the key business model of RML and one of the most difficult tasks given the condition of Indian villages. However, RML has done a great job. It has established several rural distribution networks, agri-input shops and co-operative banks that all distribute RML. Subscription is sold in the form of pre-paid quarterly scratch cards as well as bi-annually packs. This is to cater to the lower socio-economic markets who might not have the money to buy a longer subscription.
• Service: It has a toll-free number to cater to the consumers. Multi-lingual customer care is the key to the highly efficient service that RML boasts. In a secular country like India consisting of a plethora of languages and illiteracy among the poor, this is quintessential. It also employs an efficient team to take care of things like personalization and delivery issues.

Inspiration

RML was formally launched in India, in the state of Maharashtra by the Minister of Agriculture, Sharad Pawar. According to Amit Mehra, CEO and Founder, “In 2007, our parent company Reuters [now Thomson Reuters] started an innovation program to incubate and build long-term transformation businesses, funded by a separate board headed by the CEO. From 2007 to 2013, we worked towards improving our service offering and developing next generation ICT based products to further impact the agri communities at scale. In 2013, a VC fund management company teamed up to support the continued development of RML and partnered in the newly formed RML Information.”

The CEO and Founder, Amit Mehra was actively involved in creating and designing the innovation. With the help from the Indian government and the parent company, Thomson Reuters, they targeted the BoP and used the ICT technology to serve rural India.

Quotations from the interview that illustrate the motivation behind the innovation. Amit Mehra, the CEO on problems and solutions (FranchiseIndia), “A farmer in India is estimated to get only 20-25 percent price of his final produce versus 40-50 percent in the developed world. Additionally, the productivity of many Indian crops is among the lowest globally. One of the key reasons is lack of relevant, timely, reliable and accurate information. Our services are enabling farmers to lower costs, increased yields and greater support in making informed decisions about their farming practices. Anecdotes by individual farmers have shown their financial benefits range from a few thousand rupees to up to four lakh rupees. RML has empowered over 1.3 million registered farmers across 50,000 villages in 17 Indian states.”

Overall impact

The 2011 World Bank Report recorded an 8% increase in price realization for RML subscribers who sold directly to traders along with a 9% higher price benefit observed among younger RML farmers. A 5-25% increase was reported in income of RML subscribers interviewed in a 2009 ICRIER Study. The 2011 United States Agency for International Development (USAID) & ACDI/VOCA recorded that 80% of farmers altered how they source information after using the RML.

We can consistently see that farmers have benefited from using RML Services. Although the benefits are not substantial, the increasing adoption rate will definitely lead to better progress for the farmers. Most of the benefits are received by younger farmers who are more technology savvy and are willing to find new avenues to obtain better prices.

Business benefit

The revenue is generated using the subscription based model. It links up with all the major networks to make it much more accessible to the farmers. Customer Value Proposition: According to the research by the Indian Council for Research on International Economic Relations, the proposition of RML to its customers was geared to increase convenience and cost savings.

Three unique values were identified:

• Easy access to personalized content: Multi-lingual teams cater to different sets of farmers. An efficient team is dedicated to personalize the content so that it is easier for the farmers to use. The distribution network and the innovative use of mobile phone technologies has been effectively implemented to target across all markets including the bottom-of-the-pyramid.
• Improved Convenience and Timely Information: RML stands out because of its business model to promote the convenience to the rural farmers who now have access to information in their desired location.
• Unique Value Proposition: While other companies may be concentrating on the top-of-the-pyramid, this company concentrates on the potential bottom-of-the-pyramid and has a unique value proposition, building on trust and convenience.
• A strong delivery network: The delivery network is very strong as RML has a large number of retail distribution outlets. The collaborations with all the major Telecom operators.
• A large installed base: It already serves millions of customers who have tremendous trust in the information it provides. This makes it difficult for others to compete.
• Service It understands the importance of farmers and their socio-economic conditions. It has set up a strong customer service team to cater to their needs accordingly.

Strategy for Growth: RML is trying to diversify through different business segments where it can use the same business model under its core competencies of information and network of distribution. It aims to further serve the rural population including dairy farmers. However, scaling up its business would require innovation in the business model and they would have to redefine their role as an aggregator.

Social and environmental benefit

RML Services provide a clear choice for farmers. They are given information about prices and about the crops in general. It clearly has had a huge impact in areas where it has been supported by the government. Farmers have shared that they are not bound to sell their produce to traders at a fixed low price. They report an increased opportunity to have autonomy in their business. Thus, the major benefit of RML Services has been the empowerment of farmers.

Interview

Savita Ajgaonkar, HR Business Partner