Reducing market separation through e-commerce: cases of Bottom of the Pyramid (BoP) firms in India

ABSTRACT

Market-based solutions for poverty alleviation at the Bottom of the Pyramid (BoP) have been discussed extensively in the literature. Most BoP producer firms are based out of remote locations and suffer from informational asymmetry and a lack of financial resources. This study looks at three BoP firms through Bartels’ theory of market separation to examine whether the adoption of e-commerce helps reduce gaps between producers and consumers. The findings indicate that e-commerce has enabled firms to decrease the spatial, temporal, and informational gaps; however, the effect on the financial gap is yet to be determined. It also recognizes the importance of e-commerce adoption as an effective market-based solution for BoP firms. The findings helped develop a conceptual framework to understand the stages of e-commerce channel adoption by BoP firms. The implications of our findings for theory and practice are discussed.

KEYWORDS:

• Poverty alleviation
• e-commerce
• bottom of the pyramid
• market separation

Acknowledgement

We thank Arindam Dasgupta and Debaleena Ray from Tamul Plates Marketing Private Limited, Vijaya Switha from Chitrika and Mukesh from Kala Raksha for their insights on their firm’s e-commerce adoption.

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Additional information

Notes on contributors

Dechen Angmo

Dechen Angmo is a doctoral student at the Indian Institute of Management, Lucknow. Her research focuses on Bottom of the Pyramid (BoP) and digital marketing. She has completed her Post-Graduate Diploma in Management from the Indian Institute of Management, Udaipur.

Rajesh K. Aithal

Rajesh K. Aithal is a Professor at the Indian Institute of Management, Lucknow. He is a fellow of the Institute of Rural Management Anand (IRMA). His research focuses on distribution channel management, BoP & rural markets.

Anand Kumar Jaiswal

Anand Kumar Jaiswal is a Professor of Marketing at the Indian Institute of Management, Ahmedabad, India. His research interests include the bottom of the pyramid markets, services management, customer satisfaction, and e-commerce. He has published papers in the Journal of the Academy of Marketing Science, Long Range Planning, Journal of Interactive Marketing, Journal of Business Ethics, Organization & Environment, Journal of Services Marketing, Journal of Consumer Marketing, Innovations, Managing Service Quality (Journal of Service Theory and Practice), Sustainability and Asian Case Research Journal, among others.