SmartLife – a new venture to sell affordable drinking water in Kenya

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An interesting new business venture poped up on my LinkedIn feed.  Interesting enough that I thought it deserved merit to share.  That new venture is SmartLife.

WHAT IS THE BUSINESS ABOUT? 

IDEO.org, the innovative global design consulting firm IDEO‘s nonprofit organization partnered with Unilever, Water and Sanitation for the Urban Poor (WSUP) and the Global Alliance for Improved Nutrition (GAIN) to create a business in Kenya that combines the sale of drinking water with nutrition products such as vitamins for children.

HOW DID IT START?  

It started as a pilot project for IDEO.org whose mission is to bring human-centered design to people living in poverty in the spring of 2012.  It originally suffered some problems sourcing the water but is now up and running as of a few weeks ago. It was started by and currently staffed by a small team from IDEO.org combined with a local Kenyan sales force.  

WHAT IS THE SOCIAL NEED IT ADDRESSES?

To provide affordable clean drinking water, needed nutrition and hygiene products to an impoverished community in Rongai, Kenya.

WHAT IS THE BUSINESS MODEL?

Water will be sold via a subscription plan model.  Where families can elect to receive regular water deliveries or can instead text the SmartLife store when they need a one-off refill.  SmartLife will initially charge 120 Kenyan Shillings (KSH) per ten liters of delivered water or 100KSH if a customer picks it up from the store themselves. Water will be delivered by local delivery force using existing distribution channels but hired by SmartLife.  The customers will pay for their water using the cellphone payments system from Safari.com’s M-Pesa.

WHAT ARE SOME CONCERNS I SEE WITH THE MODEL?

Many governments in developing countries have legitimate concern with the idea of selling water – which is a free commodity essential to life – to poor people.  Privatization of water hasn’t worked so well in other places such Delhi, India.  Relatedly one could argue that putting water up for sale doesn’t wind up serving the true bottom of the pyramid or those who need it post but rather this richer of the poor.  On the business side how can the business grow without having to bring on expensive distribution channels to serve more remote communities and how can the business compete or be picked up with other products that might be able to price lower without the nutrition and hygiene benefits.  More info on the venture can be found here.

WHAT IS YOUR VOTE?

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2 thoughts on “SmartLife – a new venture to sell affordable drinking water in Kenya

  1. Carlos

    Mexico employs a somewhat similar business model. In Mexico City you have door-to-door salesmen offering 10 gallon water containers every few days. I think that the degree of establishment of this model has some potentially adverse consequences. The government may not be as incentive’s to improve water systems given the existence of this substitute (which may or may not produce tax revenues for the state). I am a bit torn about the model described above. On the one hand, people in dire need of clean water get some access to it. On the other hand, does this discourage governments from investing in infrastructure for public goods?

    Reply
    1. Kusi Post author

      Interesting point about private models crowding out public goods which may be needed. I guess I take the perspective that if the private models like SmartLife truly work and can be expanded to serve the masses they would be better and more efficient than government systems. Yet I know in reality there are many many obstacles for this to happen. The debate is raging for example in Bogota about whether or not public services like trash collection should be private or government run. So far the private sector has done a much better job.

      Reply

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