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Indonesian Food Company Helps Itself by Making Farmers More Efficient

By David South, Development Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

The current global economic crisis is taking place at the same time as a global food crisis. Food inflation took off at the beginning of 2011. This is having a devastating affect on countries dependent on food imports and experiencing decreasing domestic production capabilities. The least developed countries (LDCs) saw food imports rise from US $9 billion in 2002, to US $23 billion by 2008 (UNCTAD), prompting Supachai Panitchpakdi, secretary general of UNCTAD, to say “the import dependence has become quite devastating.”

Garuda Food (www.garudafood.com), one of Indonesia’s leading snack food and drink manufacturers, has been boosting its own productivity by investing in improving the productivity of domestic small-scale farmers. This led to a doubling of crop purchases from peanut farmers between 2007 and 2009. By stabilising the market for peanuts and better guaranteeing income, it has attracted more people into becoming peanut farmers in the region.

This is crucial for the future of feeding the planet: we need more farmers.

Indonesia is the world’s fourth most populous country, with a population of over 238 million, spread out over a network of islands. Peanut farmers in West Nusa Tenggara (http://en.wikipedia.org/wiki/West_Nusa_Tenggara) (one of Indonesia’s poorest places) are a key part of the region’s wealth. Peanuts are the area’s third largest crop after rice, maize and soybeans, and the region supplies six percent of the country’s peanut production and 10 percent of Garuda Food’s needs.

Garuda Food says investing in farmers has raised its own productivity by a third. Turning past practices on its head, this large agri-food company is supporting small-scale farmers and helping them to boost their productivity and incomes. Conventional wisdom had been to view small-scale farmers as an inefficient hold-over from the past – the quicker they were driven out of business, the better.

The Indonesian peanut farmers were using traditional farming methods and local seeds. Knowledge of more sustainable farming methods and land management techniques was poor. The farmers were also beholden to the whims of local buyers and fluctuating market prices.

Then Garuda Food stepped in. The company’s field staff offer the farmers training, and through its subsidiary PT Bumi Mekar Tani, it spreads knowledge about new agricultural practices and provides the farmers with quality seeds and farming equipment.

The company buys crops directly from the farmers, rather than from middlemen, increasing the amount the farmer makes. A premium is also paid if the farmer achieves better quality for their crop.

“We receive substantial supply from peanut farmers in NTB (West Nusa Tenggara) and we hope the arrangement will continue,” Garuda Food’s managing director Hartono Atmadja told the Enchanting Lombok website.

Garuda Food’s initiative, with support from the World Bank’s International Finance Corporation and AusAID, through the Australia Indonesia Partnership, has raised the productivity for 8,000 small-scale farmers by 30 percent: an income boost for the farmers of 3.9 million Indonesian rupiah (US $456) per hectare annually.

Peanut farmer H. Sajidin told the IFC (International Finance Corporation): “My farm’s productivity doubled, my income improved significantly, and I can sleep peacefully at night knowing that Garuda Food will buy my crops at agreed prices.”

Raj Patel, author of Stuffed and Starved: Markets, Power and the Hidden Battle for the World Food System (http://stuffedandstarved.org/drupal/frontpage), has grappled with the conundrum of how to feed a rapidly growing planet. He finds the world is not lacking in food, but distributes its bounty very poorly and wastefully, leaving a planet where some people are literally ‘stuffed’ with too much food (the well-documented global obesity crisis) and others left to starve.

He finds the solution is often local.

“It turns out that if you’re keen to make the world’s poorest people better off, it’s smarter to invest in their farms and workplaces than to send them packing to the cities,” Patel wrote recently in Foreign Policy. “In its 2008 World Development Report, the World Bank found that, indeed, investment in peasants was among the most efficient and effective ways of raising people out of poverty and hunger.”

Patel uses the example of the southern African nation of Malawi, where “according to one estimate, the marginal cost of importing a ton of food-aid maize is $400, versus $200 a ton to import it commercially, and only $50 to source it domestically using fertilizers.”

Published: May 2011

Resources

1) Emprapa: The Brazilian Agricultural Research Corporation’s mission is to provide feasible solutions for the sustainable development of Brazilian agribusiness through knowledge and technology generation and transfer. Website: http://www.embrapa.br/english

2) Divine Chocolate: The highly successful global chocolate brand from the Kuapa Kokoo farmers’ cooperative in Ghana, West Africa. Website: http://www.divinechocolateshop.com

3) Olam: The highly successful global food product supplier brand which got its start in Nigeria, West Africa. Website: http://www.olamonline.com

4) Insects as food: Tapping the world’s vast insect population offers many ways to supplement world food sources. Website: http://ssc.undp.org/other/e-news/newsletters/april-2008/

5) Cooperhaf: The Brazilian farmers’ cooperative Cooperhaf: Cooperativa de Habitacao dos Agricultores Familiares, has put together what it calls a “social technology”, combining housing and farm diversification to support family farmers. Website: http://www.cooperhaf.org.br

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator. 

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ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2022

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India 2.0: Can the Country Make the Move to the Next Level?

By David South, Development Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

With the global economic crisis threatening to cause turmoil in the emerging markets of the global South, it is becoming clear that what worked for the past two decades may not work for the next two.

For India, the legacy issues of poverty still need to be addressed, and the country’s impressive information technology (IT) industry – which has driven so much of India’s growth – will face stiff competition from other countries in the global South. Some argue that if the IT industry hopes to keep growing and contributing to India’s wealth, things will need to change.

Unlike China, where heavy investment in infrastructure and a strong link between government and the private sector has driven the impressive manufacturing boom in the country, in India the government has de-regulated and taken a back seat, leaving the private sector and entrepreneurs to drive the change and do the innovation.

Many believe various areas need urgent attention if India is to continue to enjoy good growth rates in the coming years. Areas in need of attention include infrastructure, healthcare and education (thesmartceo.in), in particular the knowledge to work in the information technology industry of the 21st century.

One of the founders of Indian outsourcing success Infosys (infosys.com), executive co-chairman Senapathy Gopalakrishnan, told Britain’s Telegraph newspaper, “So many people’s lives have been changed by IT in India.

“People from the middle class and lower middle class have become global employees and have the opportunity to work with some of the best companies in the world. But the challenge for India is that this industry can only create so many jobs. IT is not going to solve the unemployment problem in India.”

But the coming next wave of change in information technology is an opportunity to be seized to reduce unemployment if enough people are educated to handle it.

According to Gopalakrishnan: “I strongly believe, and it’s backed up by data, that there is a shortage of computer professionals everywhere in the world, including India. The application of computers is growing dramatically and will continue to grow dramatically over the next 20 to 30 years. We have to train and create the workforce necessary to grow this industry.”

Various media stories have called this next phase India 2.0. If India 1.0 was the highly successful information technology outsourcing industry developed in the late 1980s, through the 1990s and 2000s, then India 2.0 is the next wave of IT innovation being driven by Big Data, automation, robotics, smart technologies and the so-called “Internet of things.”

Big Data is defined as the large amounts of digital data continually generated by the global population. The speed and frequency with which data is produced and collected – by an increasing number of sources – is responsible for today’s data deluge (UN Global Pulse). It is estimated that available digital data will increase by 40 per cent every year. Just think of all those mobile phones people have, constantly gathering data.

Processing this data and finding innovative ways to use it will create many of the new IT jobs of the future.

“We are living in a world which is boundary-less when it comes to information, and where there is nowhere to hide,” continues Gopalakrishnan, “If you have a cellphone, somebody can find out exactly where you are. Through social networks you’re sharing everything about yourself. You are leaving trails every single moment of your life. Theoretically, in the future you’ll only have to walk through the door at Infosys and we’ll know who you are and everything about you.”

Unlike in the late 1980s, when India was the pioneer in IT outsourcing for large multinational companies and governments, competition is fierce across the global South. The mobile-phone revolution and the spread of the Internet have exponentially increased the number of well-educated people in the global South who could potentially work in IT. China, the Philippines, Kenya, Nigeria and Ghana are just some of the countries heavily involved in this area.

If India fails to meet the India 2.0 challenge, it risks seeing its successful companies and entrepreneurs leaving to work their magic elsewhere in Asia and the new frontiers of Africa, just as many of its best and brightest of the recent past became pioneers and innovators in California’s Silicon Valley.

India’s IT sector contributed 1.2 per cent to the country’s gross domestic product (GDP) in 1998; by 2012, this was 7.5 per cent (Telegraph). The IT industry employs 2.5 million people in India, and a further 6.5 million people indirectly. IT makes up 20 per cent of India’s exports and, according to the National Association of Software and Services Companies (nasscom.in), the industry has revenue of US $100 billion.

India is now the IT and outsourcing hub for more than 120 of the Fortune 500 companies in the United States.

Out of India’s 3.5 million graduates every year, 500,000 are in engineering – a large pool of educated potential IT workers. India produces the world’s third largest group of engineers and scientists, and the second largest group of doctors.

IT has become a route that catapults bright Indian youth into 21st-century businesses and science parks and to the corporations of the world.

One visible example of the prosperity brought by IT services in India is the booming technology sector based in the city of Bangalore (also called Bengaluru) (http://en.wikipedia.org/wiki/Bangalore).

Reflective of the contradictions of India, Bangalore has 10 per cent of its workforce now working in IT, but also 20 per cent of its population living in urban slums.

The nearby Electronics City (elcia.in) is considered “India’s own silicon valley and home to some of the best known global companies.”

To date, aspects of India 2.0 are already taking shape.

One company is called Crayon Data (crayondata.com). It uses Big Data and analytics to help companies better understand their customers and increase sales and deliver more personal choices.
Edubridge (http://acumen.org/investment/edubridge/) is helping to bridge the gap for rural youth with varied education backgrounds and long-term jobs. Edubridge trains youth for the real needs of employers to increase the chances they will get a job. This includes jobs in the IT business process outsourcing sector and banking and financial services.

Infosys is working on innovations for the so-called “Internet of things,” in which smart technologies connect everyday items to the grid and allow for intelligent management of resources and energy use. Infosys is developing sophisticated software using something called semantic analytics – which analyses web content (http://en.wikipedia.org/wiki/Semantic_analytics) – to sort through social media and the Internet to track customer responses to products.

Elsewhere, former Infosys Chief Executive Nanden Nilekani is involved in a Big Data innovation to address the problem of social and economic exclusion of India’s poor. Called Aadhaar (http://uidai.gov.in/), the government-run scheme is gathering biometric data on every Indian to build the world’s largest biometric database. After being enrolled and having fingerprints and iris scans taken, each individual is given a 12-digit identification number. So far 340 million people have been registered with the scheme, and it is hoped 600 million will be registered by the end of 2014.

The idea is to use a combination of access to mobile phones and these unique ID numbers to widen access to all sorts of products and services to poor Indians, including bank accounts for the millions who do not have one. Many people, lacking any identity or official acknowledgment they exist, were prevented from engaging with the formal economy and formal institutions. Being able to save money is a crucial first step for getting out of poverty and it is hoped information technology will play an important role in achieving this.

Published: March 2014

Resources

1) India 2.0 by Mick Brown. Website: http://s.telegraph.co.uk/graphics/india2.0/part-one#top

2) Electronic City Bangalore: Regional information portal for Electronic City, an industrial technology hub located in Bangalore South, India. This portal is becoming the most favourite haunt of ECitizens living and/or working in Electronic City. Website: http://www.electronic-city.in/

3) Electronics City Industries Association: Welcome to the Electronics City, India’s own silicon valley and home to some of the best known global companies. Located in Bangalore, the Electronics City was conceived way back in the mid-1970?s as an Industrial Estate exclusively for Electronics Industries. Today the industrial estate boasts is an oasis of large, medium and small industries spanning software services, hardware; high end telecommunications; manufacture of indigenous components; electronic musical instruments, just  to name a few. Website: elcia.in

4) Godrej E-City: Situated in Electronic city and connected through NICE road and the elevated expressway, Godrej E-City brings your workplace and other major conveniences within your immediate reach. Your travel times become shorter and hassle-free. You have more time for your family and yourself. It’s time to move closer to happiness. Website: https://www.godrejproperties.com/godrejecity/overview

5) Infosys: Infosys is a global leader in consulting, technology and outsourcing solutions. As a proven partner focused on building tomorrow’s enterprise, Infosys enables clients in more than 30 countries to outperform the competition and stay ahead of the innovation curve. Website: http://www.infosys.com/pages/index.aspx

6) Tech Hub Bangalore: partnering with the UK India Business Council to establish TechHub in Bangalore.TechHub is a community and workspace for technology entrepreneurs with 1000’s of members, building the most exciting startups in Europe. We have physical community spaces in London, Manchester, Bucharest, Swansea and Riga and have members from over 50 countries.The Bangalore site will be part of a wider scheme in partnership with other British firms such as Rolls Royce, ADS, Bangalore Cambridge Innovation Network, BAe and PA Consulting with the aim of forging stronger links between the UK and India. Website: http://www.techhub.com/blog/techhub-expands-to-bangalore/

Cheap Indian Tablet Seeks to Bridge Digital Divide
Digital Mapping to put Slums on the Map
Entrepreneurs Use Mobiles and IT to Tackle Indian Traffic Gridlock
The e-Reader Battle Reaches India
Indian City Slum Areas Become Newly Desirable Places to Live
Indian ID Project is Foundation for Future Economic Progress
Indian Newspapers Thrive with Economy
Indians Fighting Inflation with Technology
Indian Solar Power Pack Powers Villages
New Weapon Against Crime in the South

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

Southern Innovator Issue 1
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Awards 1998-2003 | February 2020

UN/UNDP Mongolia Development Portal (www.un-mongolia.mn) 

I launched this portal in 1997, in the middle of a major economic crisis in Mongolia. This award-winning (winner in 1998 of the People’s Choice WebSite 500 award and the CyberTeddy Top 500 Website award) and pioneering United Nations Mongolia development web portal was singled out by UN headquarters as an example of what a country office website should be like.

At this time, Mongolia was still recovering from the chaotic and turbulent transition from Communism to free markets and democracy begun at the start of the 1990s, called by some “one of the biggest peacetime economic collapses ever” (Mongolia’s Economic Reforms: Background, Content and Prospects, Richard Pomfret, University of Adelaide, 1994). There was a thirst for information: access to the Internet was still limited and access to mobile phones was just the preserve of the rich. As a legacy of the past, information, especially that about the outside world and the country’s true economic and social conditions, was restricted. During the years of Communism, even simple travel from one place to the next was strictly regulated.

While today we can take it for granted that the Internet, and mobile and smart phones, deliver the world’s information in seconds, this just was not the case in the late 1990s in Mongolia.

“Cyber-Teddy’s Top 500 Web Site” was an online award from the late 1990s.
The UN/UNDP Mongolia development web portal addressed the urgent need to communicate what was happening in the country during a major crisis, and to transparently show what the UN was doing to address the crisis. It made critical data on the country’s development easy to find, and informed the wider world about the country and its people and culture. While the Internet had only just arrived in Mongolia, from the start the UNDP Mongolia Communications Office was experimenting with this powerful new technology to reach a global audience. This included Mongolia’s first web magazine, Ger (launched in 1998). After the http://www.un-mongolia.mn website launched in 1997, a media campaign began to inform readers of its presence. This ad appeared regularly in magazines, newsletters and newspapers.
“A UN System site. A very nice, complete, professional site. Lots of information, easily accessible and well laid out. The information is comprehensive and up-to-date. This is a model of what a UNDP CO web site should be.”

I was head of communications for the United Nations mission in Mongolia from 1997 to 1999. The mission had to primarily tackle three major crises: the country’s turbulent transition from Communism to free markets and democracy, the social and economic crash this caused, and the Asian Financial Crisis (Pomfret 2000) (Quah 2003)*.

Richard Pomfret said in 1994 “In 1991 Mongolia suffered one of the biggest peacetime economic collapses ever (Mongolia’s Economic Reforms: Background, Content and Prospects, Richard Pomfret, University of Adelaide, 1994).”

From Curbing Corruption in Asia: A Comparative Study of Six Countries by Jon S. T. Quah: “The combined effect of these three shocks was devastating as ‘Mongolia suffered the most serious peacetime economic collapse any nation has faced during this century’. Indeed, Mongolia’s economic collapse ‘was possibly the greatest of all the (peaceful) formerly’” Communist countries. 

“The years 1998 and 1999 have been volatile ones for Mongolia, with revolving door governments, the assassination of a minister, emerging corruption, a banking scandal, in-fighting within the ruling Democratic Coalition, frequent paralysis within the Parliament, and disputes over the Constitution. Economically, the period was unstable and rife with controversies.” Mongolia in 1998 and 1999: Past, Present, and Future at the New Millennium by Sheldon R. Severinghaus, Asian Survey, Vol. 40, No. 1, A Survey of Asia in 1999 (Jan. – Feb., 2000), pp. 130-139 (Publisher: University of California)

Writing in 2018, author John West  found, in a chapter titled Mongolia’s Corruption Curse (Transparency International and the World Bank had found corruption worsened in Mongolia after 2001), “In many ways, Mongolia has everything going for it. After being a satellite state of the former Soviet Union for much of the twentieth century, Mongolia regained its independence with the end of the Cold War. A relatively peaceful political revolution in the early 1990s ushered in a multi-party democracy and open society which have remained in place. … And it is blessed with vast reserves of copper, gold, coal, molybdenum, fluorspar, uranium, tin and tungsten deposits. True, Mongolia experienced great upheavals as the breakup of the Soviet Union saw its trade decline by 80%. But Mongolia was also perfectly placed to benefit from the commodity super cycle driven by China, which is now the destination for the vast majority of its exports.

“However, despite much hype about the Mongolian “wolf economy”, this country of so much promise is being dragged down by massive corruption. …

“Mongolia’s corruption is greatly weakening its attractiveness as an investment destination, is fracturing society and weakening its fragile political institutions. Its culture of corruption has also fed its love-hate relationship with foreign investors, which has destabilized the economy.” Asian Century … on a Knife-edge: A 360 Degree Analysis of Asia’s Recent Economic Development by John West, Springer, 24 January 2018.  

In this role, I pioneered innovative use of the Internet and digital resources to communicate the UN’s work and Mongolia’s unfolding crises. The UN called this work a “role model” for the wider UN and country offices. A survey of United Nations country office websites in 2000 ranked the UN Mongolia website I launched in 1997 and oversaw for two years (1997-1999), third best in the world, saying: “A UN System site. A very nice, complete, professional site. Lots of information, easily accessible and well laid out. The information is comprehensive and up-to-date. This is a model of what a UNDP CO web site should be.” (http://www.scribd.com/doc/274319690/UNDP-Mongolia-United-Nations-2000-Survey-of-Country-Office-Websites)

As part of a strategic plan to raise awareness of Mongolia’s development challenges and to spur action on meeting them, a Communications Office was established for the UN mission in 1997. Acting as a strategic hub, the Communications Office and its dynamic and talented team, were able to leverage the existing budget to spur action on many fronts.

In 2001, the UN won the Nobel Peace Prize for “their work for a better organized and more peaceful world” and its communications innovations, with work such as that in Mongolia being cited as a contributing factor to the awarding of the Prize. 

The Nobel Peace Prize 2001 joint winners.

GOSH Child Health Portal (www.gosh.nhs.uk)

In 2001 I undertook a two-year contract to modernise the online resources for the Great Ormond Street Hospital for Children NHS Trust (GOSH)/Institute of Child Health (ICH). My strategy was inspired and informed by initiatives encountered while working as a health and medical journalist in 1990s Canada – a time where government austerity spurred a need to experiment and try new ways of doing things.

Having seen the impact first-hand of pilot experiments in Toronto aimed at widening access to information and resources for patients and their families, I applied this knowledge to the GOSH Child Health Portal Project (2001 to 2003). Drawing on the wider NHS Modernisation Plan, and a multi-year consultation process undertaken by the hospital, the Project was launched in three phases. 

How far the UK had fallen out of step with global developments with the Internet became clear from the start. The distance that had to be traveled in the span of two years was vast. Essentially, to go from being a web laggard to a web leader. 

Award-winning (http://www.scribd.com/doc/35249271/Childnet-Awards-2003-Brochure), the GOSH Child Health Portal was called by The Guardian newspaper one of the “three most admired websites in the UK public and voluntary sectors,” and a UK government assessment called the overall GOSH child health web portal a role model for the NHS. At the time, Prime Minister Tony Blair (whose wife, Cherie Blair, was an early supporter and champion of the project) had this to say: “Making sure that your child has helpful, easy-to-read information will make a significant difference to their time in hospital. I am sure that this website will prove very useful for children and their families.”

The project was delivered in three phases. At every stage, progress was communicated to the wider public and colleagues in various ways, via in-house media and through constant engagement with British news outlets. Screen grabs and other resources from the project can be found online here: 

Phase 1: https://books.google.co.uk/books?id=g826gFjEXWsC&printsec=frontcover&dq=gosh+health+phase+1a&hl=en&sa=X&ved=0ahUKEwj5u__dqIHLAhVJOxoKHZ3IDZcQ6AEIJTAA#v=onepage&q=gosh%20health%20phase%201a&f=false 

Phase 2: https://books.google.co.uk/books?id=E2ZVlFbrCzsC&printsec=frontcover&dq=gosh+health+phase+2a&hl=en&sa=X&ved=0ahUKEwjEodr0qIHLAhWK2BoKHStJB7QQ6AEIJjAA#v=onepage&q=gosh%20health%20phase%202a&f=false

Phase 3: https://books.google.co.uk/books?id=KVE6QqDp1HsC&printsec=frontcover&dq=gosh+health+phase+3&hl=en&sa=X&ved=0ahUKEwiXwe-FqYHLAhVBvxoKHXhOCooQ6AEIJjAA#v=onepage&q=gosh%20health%20phase%203&f=false

Project documents: https://books.google.ca/books?id=4aeDBgAAQBAJ&dq=gosh+child+health+portal+key+documents&source=gbs_navlinks_s

The Cable and Wireless Childnet Award called Children First “an outstanding example of how a hospital can create quality, authoritative information on issues relating to health in a fun, child-centered and accessible way.”

More here from The Guardian and CBS: Hospital unveils international website for children and Web Projects For Kids Get Their Due 

The Childnet Awards in 2003 were awarded by Trond Waage, the Norwegian Ombudsman for Children, at the Science Museum in London.

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2021

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Help is at Hand for India’s Beleaguered Bus-riders

By David South, Development Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

The website is a simple affair: a distinctive logo sits above a lean-looking booking system that allows users to enter their journey start and end destination, date and then click for available buses and prices. Its simplicity is deceptive: redBus is a smart technological solution to a very complicated problem in India: booking and buying a bus ticket. The service it offers – relief from a chaotic, frustrating and time-consuming task – is transforming the experience of travel in India.

Based in India’s technology hub of Bangalore (http://en.wikipedia.org/wiki/Bangalore), redBus (redbus.in) is a web start-up begun by young whizzes from technology companies who decided to take a risk and venture out and do something new.

Back in 2005, redBus’ three founders, all graduates of one of India’s top engineering schools, were working in Bangalore for well-known information technology companies such as IBM, Texas Instruments and Honeywell.

As they tell the story on their website, it was the difficulty of getting a bus home during the Hindu religious festival of Diwali that prompted the inspiration. The trip was a last-minute decision, and buying bus tickets proved far from easy. On top of failing to get a ticket from various travel agents, journeying around Bangalore meant encountering the city’s traffic gridlock.

This experience led to the idea of developing a service to book bus tickets over the Internet.

RedBus quickly evolved into an innovative service offering multiple options to customers. They can call a phone number and speak to a customer service representative or use a mobile phone to book a ticket. RedBus claims to have sold more than 8,000,000 tickets to date.

Tickets are also delivered to customers in major cities in advance of their travel. Even more conveniently, redBus developed a service called mTicket. It sends the ticket by SMS (mobile phone text message) straight away when a customer makes a booking. The mTicket appears on the display screen of the mobile phone and the customer just has to show their mTicket to the driver to board the bus.

RedBus uses partnerships to expand their distribution network, and this means redBus tickets can be purchased at more than 75,000 outlets. The company now works with more than 350 bus operators, allowing customers to book tickets on more than 4,500 routes across India.

The service set out to achieve two goals: create a one-stop shop for ticket purchases, and to make it possible for customers to get tickets when they needed them and not be told they have been sold out.

Indians were already having success with booking airline tickets online. But nobody else had thought of doing central, online sales for bus tickets before.

Research was behind redBus’ success. The founders interviewed bus operators, consumers and venture capitalists before setting up the business.

They then set about writing the code for the Internet service and put together a business plan and presented it to The Indus Entrepreneurs (TiE) (tie.org) – a network of mentors who help young entrepreneurs. With the support in place, they were able to leave their well-paying, secure jobs to start redBus.

Among the many challenges they faced was changing the mindset of bus operators used to dealing only with travel agents working out of sales offices.

It also took time for the concept to take off. But as word-of-mouth got around, more people started to use the website. The young team grew from just three to 50 within nine months.

Their business success, as they describe it, is the result of listening to, and soliciting feedback from their customers. They say it has helped them identify what is going wrong and fix it, and describe their business culture as “learn, implement, grow.” They also have a culture of sharing ideas and mistakes to encourage learning. It seems it is this buzzy, youthful and always-learning business culture that is behind redBus’ success.

Resources

1) IDiscoverIndia: A website detailing how to explore India’s vast bus network.Website: http://www.idiscoverindia.com/Travel_Info/india_travel_bus.html

2) TiE: Fostering Entrepreneurship Globally: The Indus Entrepreneurs (TiE),was founded in 1992 in Silicon Valley by a group of successful entrepreneurs, corporate executives, and senior professionals with roots in the Indus region. TiE’s mission is to foster entrepreneurship globally through mentoring, networking, and education. Dedicated to the virtuous cycle of wealth creation and giving back to the community, TiE’s focus is on generating and nurturing our next generation of entrepreneurs. Website: tie.org

Creative Commons License

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2021