Innovation Trends

Top three benefits:

• Save on transportation running costs. 
• Reduce the carbon footprint of the company.
• Extend the reach of delivery agents in a convenient way. 

Top three challenges:

• High purchasing costs might be prohibitive. 
• Rural markets lack battery charging infrastructure. 
• Some countries have no or few suppliers offering robust vehicles.

Photo credit: OX Delivers

Trailblazers:

• Mobile Power has developed a battery swap network for motorcycle taxi drivers in Sierra Leone. 
• Jumia has partnered with various e-bike and e-cycle companies in Kenya and Ghana to replace part of their existing fleet and offer affordable and eco-friendly deliveries to consumers.
• Ampersand builds e-bikes and charging systems optimised for the five million motorcycle taxi drivers in East Africa. 
• OX Delivers (GDC member) offers on-demand logistics in emerging markets using zero emissions trucks. Read our spotlight on OX here.
• Let us know who else should be on this list

Resources:

• Recurring events such as this Africa e-mobility Forum that was held by UNEP in March 2023.
• Networks and communities such as the Association for Electric Mobility & Development in Africa (AEMDA).
• Connect with development organisations implementing e-mobility programmes, such as GIZ that is promoting India’s transformation to sustainable and climate-friendly e-mobility from 2021 to 2025. Siemens Stiftung has programmes in Africa and donors like UK aid-funded PREO, EEP, USAID DIV and P4G have a track record financing electric vehicle projects.
• See if you can influence national policies together with other organisations and inform roadmaps such as this roadmap in Kenya! that was commissioned by the German Embassy in Kenya.

Top three benefits:

• Can be applied to both B2B and B2C business models, with the former being more common to date.
• Give customers access to a wider variety of products and the chance to browse and buy products at home and at their time of convenience.
• Combat supply chain challenges and reduce costs of managing sales teams in the field. 

Top three challenges:

• Not all customers have internet-enabled devices.
• Gaining consumer trust might require face-to-face interactions and product demos.
• Mobile money and other digital payment solutions might not be widespread yet.

Photo credit: Essmart

Trailblazers:

• Econome (GDC member) & Sevi are past GDC Innovation Challenge winners that piloted a simple e-commerce app for sales agents to support customers to sign up for group purchases (read more)
• Essmart (GDC member) enables rural shop owners in India to stock from Essmart’s curated digital catalogue. So far, they have sold almost 300,000 products in this way.
• Jumia offers a wide selection of products to more than eight million active consumers across Africa. In Ivory Coast, Jumia expanded across secondary cities, adding products for women farmers (read more).
• Copia has served almost two million customers to date, including the low-income population. Besides buying products directly online, customers can purchase through one of the 50,000 digital-enabled Copia agents across Kenya. 
• Let us know who else should be on this list

Resources:

• Learn from leading companies on how to ​​make e-commerce more inclusive in this GDC webinar (October 12th 2023). 
• UNCTAD eTrade for all offers courses and opportunities for small businesses wanting to start with digital commerce.
• GSMA’s upcoming research on e-commerce adoption in Africa will feature a survey of 1,500 MSMEs, to understand their pathways to digital commerce, and the challenges they are experiencing.

Top three benefits:

• Expand your workforce quickly and easily, for either long-term or short-term assignments. 
• Check the workers’ profile and ratings, if available, before engaging them.
• Let the platform handle (basic) training and payments. 

Top three challenges:

• Not all countries have online work platforms. 
• Workers might be less loyal to one last mile distribution company if new opportunities are presented on the platform. 
• Gigmatching platforms have been criticised for not offering decent work conditions such as fair wage and working hours.

Photo credit: Alexandre Allegue

Trailblazers:

• MESH is an online community for entrepreneurs in the informal economy that has registered more than 150 thousand members. Unilever is recruiting retailers in Kenya through the MESH platform. 
• Jobtech connects talented people to employment opportunities through gig matching, job matching, and e-commerce.
• Instadriver offers an online marketplace to hire one of the 10,000 registered and verified (truck) drivers. 
• Shortlist is an executive search and talent tech company that helps its clients across Africa and in India build great teams. 
• Let us know who else should be on this list

Resources:

• The Jobtech Alliance presents current trends and challenges in Africa’s job sector.
• This free online course on Exploring Business Models in the Jobtech Sector features speakers from the Jobtech Alliance, Caantin and M-Kopa. 
• CGAP’s report explores how gig platforms enable financial inclusion. 

Listen to The Flip Africa podcast episode on the future of work.

Top three benefits:

• Lower the costs of customer acquisition (for PAYGo cross-selling).
• Better manage credit portfolio risks (for both), specifically once someone has paid off one product, they are low-risk candidates for a second loan (for PAYGo cross-selling). 
• Offer customers more products such as improved cookstoves, biodigesters, water filters and solar fridges (for both). 

Top three challenges:

• Adding new product categories might require substantial investments in marketing, agent training, and after-sales support.
• Scaling of PAYGo sales requires access to working capital, and wide adoption of mobile money among customers. 
• Categories other than solar energy present fewer PAYGo enabled options to choose from.  

Photo credit: Practical Action and Edoardo Santangelo

Trailblazers:

• D2D Pro was a UK aid funded project in which Bopinc piloted cross-selling of solar home systems and bioethanol cookstoves in Nigeria (read more).
• M-Kopa has sold water tanks to customers that previously bought their solar products. M-Kopa also started selling PAYGo smartphones.
• Supplied by SunCulture, Bboxx in Togo started to deploy solar irrigation pumps using the same PAYGo model they used for their Solar Home Systems (read more).
• Gas360 in Nigeria has added PAYGo to their LPG gas cylinders.
• Let us know who else should be on this list

Resources: 

• BFA’s study of payment behaviour, churn, and customer lifetime value from the PAYGo workstream of their FIBR Project.
• World Bank’s solar energy 2022 state of sector report investigates why PAYGo and cross-selling are such an important trend.
• PaygOps’ report debunks myths about PAYGo and explores use cases for new product categories. 
• CGAP explores how PAYGo goes beyond solar.

Top three benefits:

• Reduce the affordability gap for customers who do not have the funds to make a downpayment or commit to a PAYGo plan. 
• Add a competitive advantage and engage a customer segment that is largely underserved. 
• Increase the likelihood of products having extended lifespans and being collected and recycled, as the manufacturer remains responsible.

Top three challenges:

• Income from rental services might be more volatile. 
• Products can go missing and or get damaged because customers could be less careful if they don’t own the products. 
• As new and better products become available, the distributor or operator that owns older versions is at risk of leasing obsolete technical equipment.

Photo credit: Pollinate Group

Trailblazers:

• In 2021, SolarAid (GDC member) piloted a rural utility extension model that enabled thousands of customers living in (extreme) poverty to access solar home systems while only paying for the electricity they use.
• Alongside leasing arrangements for solar home systems (SHS) with households, Moon (GDC member) is able to offer a unique energy-as-a-service model that reduces the overall costs for end-users in Togo.
• Aptech Africa offers farmers to use solar irrigation pumps as a prepaid service with a fee per litre that includes lifetime maintenance and irrigation training (read more here). Similarly, Claro Energy offers a pay-per-use solar irrigation service that is made available on-demand to small and marginal farmers in India (read more here). 
• WidEnergy (GDC member) received an IAP fund to pilot the sales of utility-type subscriptions for low-income households to enjoy drinking water, clean energy, and connectivity through rural hubs that are operated by women.
• Surechill launched a rental model for their fridges, allowing customers such as small retailers to pay per unit of cooling they consume.
• Let us know who else should be on this list

Resources: 

• Efficiency for Access’ case studies consider service business models that address affordability. 
• HBR’s article on circular business models.
• SITRA and Demos Helsinki share findings on business opportunities for rethinking product ownership.

Top three benefits:

• Make better informed business decisions and improve the efficiency of daily business activities such as stock replenishment.
• Assist agents with customer creditworthiness assessments.
• Increase the efficiency of market expansion through targeting specific communities.

Top three challenges:

• Data points and algorithms might lead to unintentionally biased decisions that disadvantage certain customer demographics.
• The quantity and quality of data available to last mile distributors might be insufficient and lead to wrong business decisions.
• If companies lack IT capabilities, organising and analysing data can be difficult and time-consuming. 

Credit: Practical Action and Edoardo Santangelo

Trailblazers:

• Nithio is an AI-driven platform for climate finance and a past GDC Innovation Challenge winner that helped Vitalite Zambia (GDC member) develop a data-driven underwriting service for their credit portfolio. 
• Kambasco (GDC member) in Uganda collaborated with SACCOs and a Mobile Network Operator, allowing them to exchange data to better risk-assess their customers (watch the webinar).
• Maad and Optimetrik have developed remote agent management software that includes tools like agent route planning. 
• Let us know who else should be on this list

Resources: 

• Service providers such as VIDA and Fraym offer hundreds of unique population attributes to analyse and compare communities across the globe. 
• CGAP‘s technical guide includes recommended data points and indicators for credit assessment. 
• Prospect, A2EI and GET.invest’s open-source data platform, optimises real-time data collection, analysis, and visualisation to support sustainable energy stakeholders in providing affordable and clean energy access for all. 
• Energy Access Explorer maps show the state of energy access in underserved areas across Africa and Asia.
• Open Data Cube is an open source geospatial data management and analysis platform with projects in Africa.
• Power BI is a popular tool for data visualisation 
• Find more digital service providers in our GDC Digital Service Catalogue.

Top three benefits:

• Reduce costs of marketing, product troubleshooting and after-sales services (for chatbots).
• Easily personalise content for different customer segments (for both chatbots and AI). 
• Develop branding, marketing collateral and copy without hiring creative agencies (for generative AI).

Top three challenges:

• Customers might not have smartphones required to access chatbots.
• Generative AI has been criticised for reinforcing stereotypes (make sure you always check whether the content might be experienced inappropriately by your customers). 
• Few providers have a tailored proposition for low-income markets. 

Photo credit: Bopinc

Trailblazers:

• Proximity Designs developed a Facebook chatbot providing agronomy advice to more than two million farmers in Myanmar (access the chatbot here).
• Fortell.ai built an AI tool for NGOs to generate training copy and videos in local languages. 
• Let us know who else should be on this list

Resources: 

• DAI shares what does and does not work for chatbots in the development sector.
• CFI, in partnership with USAID and DAI, created an investor’s guide to promoting equitable use of AI in the inclusive finance sector.
• Landbot is a chatbot builder that is intuitive to use. 
• ChatGPT generates human-like text based on context and past conversations. 
• Dall-E generates images, mostly artistic, that can be used for marketing collateral. 
• McKinsey writes about the economic potential of generative AI to transform global economies. 
• Check out this 101 course for small businesses to get started with generative AI.

Top three benefits:

• Reduce the environmental footprint of the company and help manufacturers comply with (new) regulations such as Extended Producer Responsibility (ERP).
• Improve customer satisfaction by offering repair and replacement beyond the warranty period, or selling refurbished items that are more affordable to customers. 
• Create new income opportunities for sales agents or informal workers that are trained on repair and product collection. 

Top three challenges:

• Consumer awareness on the impact of e-waste might be low. 
• E-waste recovery can be costly and complex, with small margins, meaning the business case might be challenging. 
• Repairing and refurbishing of e-waste requires technical skills and facilities (last mile distributors might want to partner with existing e-waste companies and only offer product collection and reverse logistics).
  
  

  Photo credit: SolarAid/Jamiel Banda

Trailblazers:

• SolarAid (GDC member) is combating e-waste by creating repair manuals and training their agents in Zambia (read more).
• InnoNeat is a Kenyan startup that manufactures refurbished batteries for solar home systems. 
• WEEE Centre in Kenya collects, repairs and refurbishes e-waste through a network of collection centres.
• In the REWMOS project, Solibrium Solar piloted a business model for electrical waste management and recycling of solar home system components.
• Let us know who else should be on this list

Resources: 

• SolarAid’s repair app is freely downloadable on the Google Play Store for Android users. 
• The MECS programme studied the opportunities and limitations of end-of-life management for appliances.
• GOGLA‘s e-waste toolkit helps off-grid solar companies to address the main challenges of e-waste management such as e-waste regulation and consumer awareness raising.

Top three benefits:

• Earn higher margins on more expensive appliances. 
• Fulfil a growing demand among customers as appliances powered by fossil fuels become less economical. 
• Positively impact livelihoods of rural customers as they use the appliances to generate more income.

Top three challenges:

• Procurement of these products can be more challenging.
• Selling PUE might require specialised sales teams and after-sales support that is more complex and costly. 
• Consumer finance models might lead to mixed results based on experiences of last mile distributors to date. 

Photo credit: Mwezi

Trailblazers:

• GDC members Solar Sister, Village Infrastructure Angels, VITALITE Zambia and EnerGrow share first-hand insights of selling PUE products (watch webinar)
• ECOTECH distributes solar irrigation systems and other climate smart PUE solutions in Zambia.
• Mwezi (former GDC member) added (solar) drip irrigation to their portfolio and developed a How-to-guide, with support of the GDC. 
• Let us know who else should be on this list

Resources: 

• GDC report with lessons learned from 13 last mile distributors that have experience of testing or selling productive use of energy (PUE) products. 
• Efficiency for Access is promoting high-performing appliances that enable access to clean energy for low-income consumers.
• An assessment of the market opportunity for PUE products presented by Lighting Global and others.
• Nefco conducted a study to explore opportunities to expand BGFA’s existing PUE activities in this report.
• An Energypedia list with PUE products that use solar power as an energy source in agrifood systems.

Top three benefits:

• Develop new income streams to fund expansion. 
• Use carbon credits to subsidise products to increase the addressable market.
• Close the affordability gap to scale access to clean energy solutions.

Top three challenges:

• Acquiring and sustaining the right certification of carbon credits can be a time consuming process.
• Maintaining liquidity given the mismatch between the timing of costs incurred to set up a carbon project and income generated from the carbon project. 
• Managing carbon price volatility. 

Photo credit: GDC

Trailblazers:

• ATEC (GDC member) is a manufacturer and distributor of biodigesters that sold 11.5M tons of carbon credits to ENGIE (read more here).
• BURN collects usage data from their e-cookers to support carbon credit sales.
• EcoZoom Cookstoves claims to mitigate 2-3 tons of CO2 per cookstove per year
• Emerging Cooking Solutions are leveraging carbon credits in Zambia
• Let us know who else should be on this list

Resources: 

• Get introduced to the carbon markets in Africa with this Dalberg x TED video.Acumen wrote about how carbon credits are driving down the costs of climate-friendly goods in Africa.
• The Clean Cooking Alliance is hosting working groups for responsible carbon finance. 
• A new study from the Container Based Sanitation Alliance finds that carbon credits can provide a viable revenue for container-based sanitation providers in urban areas.

Top three benefits:

• Piggyback on reputable brands, networks, capital and expertise of large companies (for strategic partnerships).
• Reduce dependency on traditional, and often challenging, approaches such as fundraising to realise scale (for both).
• Combine resources to establish a new and competitive value proposition for customers (for mergers). 

Top three challenges:

• Aligning ways of working and organisational cultures might be challenging when working with large players. 
• Reaching mutual and lasting beneficial alignment can be jeopardised by unforeseen changes in business strategies and priorities of the individual parties. 
• If not supported by an impartial facilitator, negotiations can become lengthy and troublesome.

Photo credit: Solar Sister

Trailblazers:

• Pollinate and Empower Generation merged into the Pollinate Group (GDC member) in 2018. They talk about their experiences of this 16-month process in episode 107 of the FLIP podcast in partnership with the GDC. 
• Other last mile distributors that merged are GDC members Livelyhoods and Solar Sister (2022), and companies like Solaraid and Ellesolaire (also both GDC members) have entered strategic partnerships (read more here).  
• Since 2016, Aqua for All has helped distributors of household water filters to partner with water utilities in Ethiopia.
• Let us know who else should be on this list

Resources: 

1. GSMA reflects on the optimal role for MNOs to support PAYGo solar companies.
2. Research on strategic investments and mergers in off-grid energy access by WoodMackenzie in partnership with Energy4Impact.

Top three benefits:

• Get more out of diverse teams and benefit from the qualities of women in leadership positions. 
• Become a more attractive employer, which helps to attract and retain motivated staff at a lower cost.
• Tap into the knowledge of field staff for swifter identification of problems and development of solutions that really work. 

Top three challenges:

• Not all countries acknowledge legal forms such as social enterprises, and business certifications such as B corp might require prohibitive administrative and legal efforts.
• Having more opinions might lead to more discussions and slower decision-making, if not well facilitated. 
• While investors increasingly appreciate diverse and equitable organisations, fundraising might be more challenging if a company uses non-traditional governance models.
  

Photo credit: BBC StoryWorks

Trailblazers:

• Instead of granting company shares to senior executives only, Wasoko gives all their full-time employees stock options through an Employees Share Option Plan (ESOP) which is a model that gains popularity among African tech startups.
• SolarAid (GDC member) has explored ways to scale sales of solar energy products by setting up microfinance cooperatives led by sales agents (read more in the How-to-guide they developed with the GDC). 
• GDC member OX Delivers is in the process of becoming B Corp certified, which holds them accountable to a range of impact standards moving forward. Read our spotlight on OX here.
• Let us know who else should be on this list

Resources: 

• The GDC and Value for Women present various business strategies for how to improve gender equality, drawing upon lessons from last mile distributors. 
• Efficiency for Access did a thoughtful assessment of how inclusive the lighting and appliances sector currently is. 
• We Are Stewards is a Netherlands based organisation that offers a unique governance blueprint to companies and investors that want to safeguard their purpose.
• Check out this overview of B Corps in Africa and guidelines for how to apply. 
• Explore an intro to Employee Stock Ownership Plans (ESOP) on Investopedia.