Posts Tagged ‘M-Kopa’

Is the pay per use business model changing household purchasing dynamics?

DSC08309The process of writing the previous post on India’s energy efficient cook-stove development efforts made me pause and reconsider my assumptions. Here’s the snippet that struck me in the article.

Philips took its India stove to more mature markets in Africa, where a raft of foreign-funded stove projects had familiarised customers with the product.

This seemed to explain why, when M-Kopa, the pay as you use solar system startup in Kenya, expanded their product line, the most popular first choice for low income consumers were improved cook-stoves.

Energy-saving stoves have been the highest seller to date, while smartphones are also proving popular.

Given the recent hand-wringing over the toilets vs phones stats, I would have expected smart phones to have been more popular than stoves. The fact that they aren’t implies to me that something more is going on than is apparent on the surface. I don’t think its as simple as “sensitization” efforts by NGOs, since the aspiration is still LPG not an improved stove.

You’ll note the assumption made in the pullquote from the Indian cook-stove article:

Women’s time and health were not valued; any family with Rs 1,000 to spare would first buy a mobile phone.

So, the question raised is whether M-Kopa changed this household dynamic, in a market where women’s domestic roles are similar to India’s?

During my exploratory user research study on household energy consumption behaviour for ToughStuff, a now defunct manufacturer of small solar products aimed at the exact same market segment in Kenya, I discovered that one of the barriers to the purchase of the product was the question of “Who would pay for it?”

The phone is a personal asset, purchased by the individual saving bits and bobs from their earnings, over time. Solar power or a cook-stove, is an asset shared by the entire household. Could it be that M-Kopa’s business model, predicated as it is on daily micro-payments to keep the lights running, has changed the dynamics of household purchase (rather than women’s roles)?

Its possible that whoever had the extra 50 shillings in their M-Pesa account sent it to M-Kopa for the day’s payment, and people took turns rather than the burden of purchase falling entirely on one income earner’s shoulders.

And now that more products have been made available for sale through this micro-payment method, it has opened up the opportunity for the purchase of more shared consumer durables, like cook-stoves, rather than individual items of use, like smartphones.

Given the implications of these snippets of insight from M-Kopa, and their importance to both women’s empowerment and the dynamics of domestic finance, I wish that the company would do more to release information, or offer their data for indepth analysis.