On The Ground

India 151

World Water Day: Notes from the field

I spent the month of February in India working with companies in Acumen’s water portfolio and conducting due diligence on prospective new water investments. During the month I had a chance to visit a number of community water kiosks – small-scale treatment facilities where customers purchase drinking water in refillable containers (a la WaterHealth International) – in Eastern and South India. I had the opportunity to speak with each of the kiosk operators and to interview dozens of customers and non-customers. In honor of World Water Day, I thought I would share some insights and reflections from these visits.

  • Convenience matters. Convenience seemed to be one of the most important factors driving uptake. Customers within a village seemed unwilling to walk long distances to get water from a kiosk (the median distance customers travel to one company’s kiosks is 40-50 meters) since there are often free, closer options available. During my visits I passed dozens of government-installed hand pumps, and in some regions customers have shallow wells in their backyards. These solutions, while free and convenient, are typically microbiologically contaminated. Recognizing that customers value convenience, many companies have begun to introduce home delivery in order to increase village penetration. One company reports that home delivery extends the range of the customer base by 1-2km and currently accounts for ~30% of their revenue. One woman I met lives only 50m from the kiosk yet opts for home delivery because she doesn’t want to take time away from working to pick up the water; she prefers to pay the additional Rs. 2 ($0.04) for home delivery.
  • Marketing health impacts is not easy. Marketing and education campaigns around the health effects of drinking unsafe water are notoriously difficult to execute. Even if you do manage to convince people that there is a link between water and health, challenges still exist. When I asked one man why he stopped buying treated water, he told me that the company claimed the water was healthy but he still got a cold after starting to drink it. He concluded that it must not be so healthy after all. My takeaway is that water companies must be careful how they market the health impact of their water. If using health messaging, companies must try to clarify that water is linked primarily to diarrheal disease (not other ailments/illnesses such as colds) and that it is only one part of the puzzle (improving hygiene and sanitation being the other key drivers of reducing diarrheal disease). It is not easy to convey these nuances in mass marketing campaigns; fortunately, there are other aspects of the kiosk water (convenience, taste, reliability) that companies can highlight in addition to potential health improvements.
  • Visual appearance matters. In some villages I visited, customers complained about suspended particles or cloudiness in their kiosk water. Despite the fact that the water is safe for drinking, people clearly prefer to drink water that is clear – particularly if they are paying for it. Who can blame them? Why pay for water that looks the same as water you can get from traditional sources? Making the water clear and visually appealing may seem like a no-brainer, but it is surprising how many safe water systems don’t take this into account.
  • Households have many competing priorities. In one village in Eastern India, I asked a kiosk operator some questions about his community’s access to various services. Out of 300 families in the village, he estimated that: 50 have landline phones, 60 have a toilet, 150 have cable TV, and 300 have at least 1 mobile phone. These numbers tell us something about what people value. After probing some more, I learned that cable TV costs a family Rs. 80 / month ($1.80), just slightly more than drinking water from the kiosk – Rs. 60 / month ($1.33). It can be difficult to compete for these Rupees… what is the value of water compared with a month of entertainment?

I realize that these observations may not hold true in other countries or even other regions within India, but they at least give some perspective on the issues that community water companies face in trying to sell their product. I look forward to hearing others’ perspectives on these issues.

Happy World Water Day.

Marc Manara is the Water Portfolio Manager at Acumen Fund.

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