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Frugal Innovation in India Needn’t Equate Cheaper Production

June 2012

By Reshma Bachwani, Bangalore

Innovation has become a mandatory cliché in the corporate circles. For many, the low-cost innovation model has meant stripping down existing products to service price-sensitive markets, like India. But it’s an approach that has not always worked. There are brands that have upset the apple cart and take the price-value equation to a new level. These brands have created opportunities not only for themselves, but also for their consumers.

Micromax has done just that with the mobile handset market. In the four years since its launch, it stands in the top-three list of handset sellers in India. Micromax launched full-featured phones targeted at the rural markets, with a price-value combination that was enviable, truly living up to their tagline: “Nothing Like Anything.” Priced between $30- 50, their handsets both double as a gaming device, or remote control, and were the first in India to introduce long-life batteries.

The Energy and Resource Institute's TERI is another such example. Their solar lamp has lit up lives across hundreds of Indian villages. The lamps can be hired for as low as $.03 and can be recharged at community charging stations. It has positively impacted education and living conditions, created employment opportunities, and best of all- it's clean fuel.

What the Tata group has accomplished through its water purifier, Swach, is not only making potable water available at a running cost of $.005 per day, it has also acknowledged the natural constraints around its usage. The purifier does not need running water or electricity to function. These instances just go to show that frugal innovation in India does not mean frugal thinking.


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