RevoLooTionary: Developing Rural Markets for Sanitation

RevoLooTionary: Developing Rural Markets for Sanitation

CambodiaPhnom Penh, Cambodia
Organization type: 
nonprofit/ngo/citizen sector
Project Stage:
Scaling
Budget: 
$1 million - $5 million
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

iDE’s stimulates the private sector to create demand for latrines and strengthens the ability of local enterprises to meet that demand.

About Project

Problem: What problem is this project trying to address?

2.5 billion people do not have a toilet, suffering dire consequences in health, environment, economics, and human dignity. Diarrheal illnesses kill more children than HIV, malaria, and TB combined. Well-meaning subsidies have depressed demand for toilets, stymied private sanitation markets, and discouraged a sense of ownership. In Cambodia, 82% of the rural poor still practice open defecation. Research, however, showed a strong demand for household latrines existed. Sanitation markets also existed in that there were customers and there were suppliers, but they had failed to address the sanitation needs, wants, and desires of the poor. Little information regarding latrine options and costs was available. Purchasing a latrine was prohibitively expensive and logistically challenging.

Solution: What is the proposed solution? Please be specific!

To address this market failure, iDE implemented a two-year Sanitation Marketing Pilot Project to test market-based approaches to improve sanitation coverage. The product and purchasing and manufacturing processes were redesigned to remove barriers to purchase; social marketing tactics were deployed to stimulate consumer demand; and businesses were shown the profitable opportunities in the sanitation market. iDE used human-centred design methodology to design the Easy Latrine, an aspirational, accessible, and affordable product, redesigned to be cheaper, simpler to install, more conveniently packaged, and recognizably branded. It has allowed the market to sustainably create demand for sanitation through the private sector without relying on government and NGO subsidies. The modifications dropped the price for a latrine from approximately $56 to just $35, increasing sales by 300% over the historical rate of sales. At $5 profit per unit, businesses are eager to sell latrines as well.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

The pilot demonstrated that private sector enterprises could profit from creating demand for and supplying sanitation products to rural households. At the start of the pilot, iDE undertook a 12-week research phase using human-centered design (HCD) to develop a marketable latrine design that would enable all rural households, regardless of income, to purchase latrines. The HCD design process seeks input from all stakeholders at every step–from initial concepts, refinement and prototyping, to final design. Sanitation stakeholders engaged in this project included latrine owners and non-owners, masons, concrete producers, and retailers. The resulting product was the Easy Latrine. iDE’s primary role in the pilot was to create demand for the Easy Latrine while ensuring supply and coordination with the government. This was done through an integrated sanitation marketing program that combines village-level promotional activities and mass media campaigns to generate market-led demand for sanitary latrines. iDE also provided training and support for supply chain actors to ensure adequate supply of sanitation products and services, and collaborated with authorities at all levels to ensure that Easy Latrine promotion is integrated with government sanitation and hygiene activities. In 16 months, almost 12,000 Easy Latrines were sold unsubsidized—300% over the historical rate of sales, and 29 enterprises entered the market. Notably, in one of the poorest provinces in Cambodia, households that the government has identified as particularly poor made a third of the purchases.
Sustainability

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

iDE’s SanMark program is no longer the only one in Cambodia. Many other sector stakeholders are engaged in marketing efforts, either as funders or implementers. All organizations involved meet periodically, carry out exposure visits to their respective implementation areas, share lessons, and continue to refine approaches to make implementation more effective. Organizations implementing similar programs do end up competing for funding, but as with the private sector, collaborative competition leads to innovation that is shared with the entire sector. The on-going learning and exchange have benefited all stakeholders and have contributed immensely to the success of the different programs.
Team

Founding Story

There is not one “founder” for sanitation marketing. However, the story behind IDE’s leadership in SanMark speaks to the value of bringing in more business and marketing skills to the sector. When Cordell Jacks and Tamara Baker left their cushy private sector jobs, sold everything to travel and look for more meaningful work, they had no idea their next jobs would be in the shit business. When their CVs landed on iDE country director Michael Roberts’ desk, he asked them to lead the new SanMark program at iDE-Cambodia. “I need you to take the world’s most unsexy product—the toilet—and get people who have very little money and limited understanding of germ theory, to buy it,” Roberts told them. But with no background in public health, sanitation, or development, how could they contribute value? Never ones to shy away from a challenge, Jacks and Baker accepted. Almost three years later, Jacks and Baker have helped ignite the private sector in Cambodia as a sustainable sanitation solution.
About You
Organization:
International Develop Enterprises
About You
About Your Organization
Organization Name

International Develop Enterprises

Organization Country

, PP

Country where this project is creating social impact
How long has your organization been operating?

More than 5 years

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Innovation
How long have you been in operation?

Operating for 1‐5 years

Which of the following best describes the barrier(s) your innovation addresses? Choose up to two

Access, Cost.

Social Impact
Please describe the goal of your initiative; outline what you are trying to achieve

The pilot demonstrated the viability of a market-based approach. In the next three years, iDE will implement three “sweeps” to achieve greater market penetration. In the pilot (sweep 1), sales were made to the early adopters – the willing and able. For sweep 2, iDE will target the unwilling and able. This might include people who do not yet see value in a latrine, those whose needs are not being addressed by the current design, or those who have money but perhaps not the right financing tools. iDE will design new products and tools like installment plans to address these needs. For sweep 3, iDE will focus on the willing and unable, who even with financial tools cannot afford a latrine. iDE will explore options like vouchers to make sanitation accessible to all without damaging the market.

What has been the impact of your solution to date?

In the program’s two pilot provinces, as of April 15th 2011, households have purchased almost 20,000 latrines—a 300% increase over the historical rate of latrine sales. Notably, sales data shows that in one of the poorest provinces of Cambodia, Svay Rieng, a 20% of the purchases were made by households that the government has identified as particularly poor.

At an average profit of US$5 per unit, the Easy Latrine is a lucrative opportunity local entrepreneurs eagerly invest in. In the two pilot project’s provinces, 24 enterprises have joined in the latrine market and have on average invested nearly $6000 into their latrine businesses. A number of the 24 enterprises joined the latrine market without any prompting from IDE. They saw the other enterprises making many deliveries and immediately recognized the promising business opportunities. The private sector has even organically expanded into an additional five districts outside the project target.

What is your projected impact over the next five years?

iDE is replicating the pilot nationally through the three-year Sanitation Marketing Scale-Up (SMSU) Project. In SMSU, iDE will enable at least 115,000 rural households in 60 districts to purchase affordable latrines and encourage at least 90 local enterprises to invest their own resources to respond to this demand. An in-depth research effort will run parallel with the project to better understand the dynamics of sanitation markets. Additionally, iDE will also develop a training center to assist in disseminating the Sanitation Marketing approach globally.

Other organizations and governments are already hiring iDE to replicate SanMark globally. iDE has already shifted several organizations’ mindsets from implementing subsidy programs to adopting more market-friendly approaches.

What barriers might hinder the success of your project? How do you plan to overcome them?

The most challenging barrier to success is the presence of subsidy programs. A high level subsidy depresses the market for privately purchased latrines. The pilot project districts with a history and/or high levels of subsidy showed markedly less demand for latrines as households prefer to wait in the hopes of receiving something free or subsidized, even if the subsidy program has ceased or is explicitly directed at the select poor. Influencing government and aid policies can have a significant impact. Greater sector coordination and collaboration will also reduce nullifying effects of contradictory programs. In the long-term, demonstration of sustainability and superior cost-effectiveness of a market-based approach will be key to convincing other stakeholders to collaborate with SanMark.

Winning entries present a strong plan for how they will achieve and track growth. Identify your six-month milestone for growing your impact

iDE is replicating SanMark through global contracts in three other countries and tripling geographic coverage in Cmbodia.

Identify three major tasks you will have to complete to reach your six-month milestone
Task 1

Completion of market assessments and strategy development and piloting in replication countries

Task 2

Tripling labor force and engaging 90+ local businesses across the sanitation supply chain

Task 3

Engaging local government to increase demand for latrines

Now think bigger! Identify your 12-month impact milestone

Replicate SanMark in 4 additional countries, launch a global dissemination platform, & achieve 23,000 latrines sales in Cambodia

Identify three major tasks you will have to complete to reach your 12-month milestone
Task 1

Completion of market assessments and strategy development and piloting in replication countries

Task 2

Strengthen public private dialogue, improve social marketing campaigns, and conduct ongoing value chain engagement

Task 3

Further develop model for education platform and develop curriculum

Sustainability
Tell us about your partnerships

The two-year SanMark pilot was funded by USAID and the Water and Sanitation Program (WSP) of the World Bank. A team of designers, researchers, and advisors contributed to the final Easy Latrine design with major contributions by Jeff Chapin, a design consultant from IDEO who provided human-centered design expertise and Ben Clouet, structural engineering consultant. iDE’s engagement with local latrine producers is integral to the success of the programs. They will continue to serve as vital partners in SMSU, which is jointly funded by the Gates Foundation, the Stone Family Foundation, and WSP.

Are you currently targeting other specific populations, locations, or markets for your innovation? If so, where and why?

iDE is scaling the SanMark globally as well. Work is already well advanced in East Timor and Laos; is underway in Nepal, Bangladesh, and Uganda; and projects are being developed for India, Zambia, Mali, and Burkina Faso.

Additionally, in SMSU, iDE will extend latrine access to areas previously inaccessible by adapting the Easy Latrine for challenging environments, such as flood-prone areas. The SanMark model is applicable in a various environments due to the large role played by the private sector, the use of transferable rural marketing strategies and simple, affordable technology designs.

What type of operating environment and internal organizational factors make your innovation successful?

The success of the pilot has prompted the Cambodia government and other NGOs to strive toward better coordination and integration of various programs. Sanitation marketing stakeholders have also formed a working group to harmonize metrics and develop the capacity of local government to support M&E. Globally, multilateral agencies like the World Bank and influential donors like the Gates Foundation are dedicating more resources to promoting market-friendly approaches to sanitation.
Internally, iDE promotes an open, flat-structure creative environment that promotes learning and growth. Unlike the hierarchical culture that dominates Cambodia, iDE rewards new ideas and hard work. One of the SanMark regional managers started as a driver, but his creativity and determination shone through.

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