Why not have an ice-cream for Re 1?
I recognise that an ice-cream cone is considered a `luxury item' by many in India. I am told that it is taxed. On the other hand, an ice-cream on a hot summer day is a welcome relief. So why shouldn't all Indian children have an ice-cream cone when they feel like it? But a Rs 20 ice-cream cone is not the answer. However, an ice-cream cone for Rs 1 would make this dream for all of India's children a reality.

A breakdown of the cost of ice cream suggests that about 40-50 per cent of the cost of ice-cream is the cost of refrigeration. Even when one pays the price for refrigeration, the chance of getting a good quality product is low in India. Ice-cream should be stored at -18øC for retaining the best texture. In most parts of India, with significant black outs, the probability of a steady -18øC is low. Further, in areas where access to electricity is not available, ice-cream vending is unlikely. Is there a solution to this problem?

The scientists at the Hindustan Lever Laboratories in Bangalore may have found an interesting solution to this problem by inventing a safe, inexpensive and a sustainable technology solution. Current methods of vending have the following characteristics:

1 kwh/kg of ice-cream during inter-city transport
4 kwh/kg of ice-cream during in-store vending operations

Risk of leakage of CFCs, a carcinogen and toxic material, and the equipment to contain the eutectic is capital intensive.

It is not surprising that the cost of ice-cream in India is too high for a mass market to develop. The consumption per capita is a meager 0.05 kg/ person/year compared to 0.5 kg/ person/year in Thailand and 10 kg/person/year in the USA. Even if we reach the levels of consumption in Thailand, India will need an additional 2.5 billion KwH of electricity.The innovation of HLL is focussed on creating a non-toxic, non corrosive eutectic coolant system for safe, low-cost and low-weight mobile vending machines. the unique contributions are along the following dimensions:

1. The system uses eutectic coolants that are non-toxic and non-polluting. All the salts used in the system are edible. This approach eliminates the pollutants from the system. Further, by dramatically altering the energy requirements, it adds to sustainable development.

2. By creating a novel approach-a heat shield in contrasted to the traditional heat sink-this approach almost approximates to a refrigerationless vending system. Under trial, the ability to insulate and maintain temperature in vending carts was superior to current best practice. Most importantly, the capital costs of the `vending box' are considerably lower.

3.The system is totally scalable

4.The system has the capacity to dramatically alter the cost of ice-cream. Work on developing the technology further to create a new refrigeration system from the factory to the end consumer is being actively pursued. This will further reduce the costs of refrigeration.

5.This system fulfills the four criteria we set out for serving the bottom of the pyramid: a unique high technology solution, contributes to sustainable development, is scalable and dramatically alters the price-performance characteristics of a simple product such as ice cream.

6.While we still do not have an ice-cream cone for Re 1, we can get one for Rs 3-5 today without degradation of quality.

Imagine the opportunities when this type of innovation is applied to develop a refrigeration platform, not just for ice-cream, but for vegetables, dairy, fish meat and more importantly medication. In addition to dramatically altering the `farm to plate' wastage (estimated at almost 10 per cent in India), it could make many ordinary day-to-day products available to the poor at very affordable prices. More importantly, this system can be exported to other India like markets?

Why not an ATM for the poor?
Access to credit is critical for the poor to escape poverty. Caught between moneylenders and landlords, most poor in India cannot escape poverty. Several initiatives such as the Grameen Bank (in Bangladesh) have demonstrated that a well-developed and carefully managed commercial system of micro-lending can create the pre-conditions for moving people out of poverty. Can the organised banking sector create strategies for the bottom of the pyramid?

As part of my consulting with Mr John Reed, CEO of Citibank, we explored the benefits of extending the served market of commercial banks to include the poor.

Serving a billion consumers became the short hand within Citi for a bold move to fundamentally challenge and change the assumptions behind banking and the price-performance levels in that business. The goal was not to become a conduit for disbursing `government sponsored subsidies'. It was an attempt to build fundamentally new business models in distribution, in price-performance levels, in features and functionality and in ease of access.

That resulted in a commitment by Mr Reed to build a totally different kind of a financial services company, which looked more like a branded consumer goods firm, a la Coke. Bangalore was chosen as a place to experiment, create and refine anew model. By developing a high technology and new distribution solution, Citi created `Suvidha' to attract a new kind of consumer-one who will be ATM oriented (rather than branch oriented).

A 24/7 solution was developed (that is better than a branch solution) and created flexibility by allowing customers to transact in any of the ATMs that are networked (so they are not stuck with one location).

Today, `Suvidha' has more than 1.50 lakh customers just in Bangalore. However, Citi is ready to launch its business model in Mumbai and the rest of India. ICICI and HDFC also offer similar services.

All that we have seen in the experiments by Citi, ICICI and HDF are the beginning of a breakthrough in thinking, the belief that the bottom of the pyramid could be a very attractive commercial opportunity and that the poor will pay for good and appropriate service. Can this innovation be leveraged in India-like markets such as Brazil? Mexico? China? Citi group can target a consumer group of 400-600 million around the world with this model. Why not ICICI and HDFC?