The turn of the millennium (and the explosive advances it has brought in Internet Business) signals the possibility for the vast numbers living today under 19th century conditions to catapult themselves, literally within a few years, directly into the 21st. The Development Alternatives Group is making a colossal effort to bring the entire bazaar or market within the reach of Rural India by using the internet.

 
The vision of this new e-business, TARAhaat Information and Marketing Services (also known as TARAhaat), is to open up a whole new ‘haat’ or village market, via the internet, for the 5,70,000 villages of the sub-continent.
 
The pilot phase, however, concentrates mainly on the villages of Madhya Pradesh and a portion of the rural belt of Uttar Pradesh. The Bundelkhand region, to be precise.
 
The Business Model
TARAhaat Information and Marketing Services Pvt Ltd (TARAhaat) is a social enterprise registered in India under the Companies Act. The TARAhaat solution covers all three major components of an effective e-commerce site: Access, Content and Fulfilment. Overall, it comprises the TARAhaat.com mother portal, together with franchised networks of local enterprises for connectivity and for delivery of information, goods and services.

The TARAhaat Pole Star, which beckons and welcomes the citizen of rural India to the centre of its universe, brings together all the components needed to bootstrap the rural market. TARAhaat shares its logo with the other organisations of the Development Alternatives Group, and thus benefits from the brand equity established by them, nation-wide, over the past twenty years. Its stellar shape symbolises the goal of TARAhaat, to create a new market that enables people to aspire to the very best – for them and for society. The outstretched anthropomorphic profile represents its all embracing, "no alibi" commitment to conceive, design and deliver whatever is required to meet these aspirations.
 
Content
TARAhaat provides access for the villager to a variety of information resources and to a wide range of market-based opportunities. Initially, these will necessarily be limited to the obvious issues of prime concern to the villager, such as commodity prices, health facilities, land records, local development programmes, business opportunities, jobs, matrimonials, etc. Users will be able to shop for farm inputs such as seeds, machinery, spare parts, and household items now becoming popular in rural markets such as bicycles, scooters, and refrigerators. Over time, information on other issues and goods of interest to users will be actively sought and made available through TARAhaat. The data, analysis and communication structures of TARAhaat.com are carefully designed so that it can smoothly evolve in response to the felt needs of its users, making it a highly participatory and thus responsive network at all levels of interaction.

TARAhaat has to be mastered and used by people with wide variations in literacy, language, financial liquidity and levels of understanding. Its design, therefore, obeys the well-known Cybernetics Principle, "Ashby’s Law of Requisite Variety": the system will be as complex as the conditions in Rural India warrant, but no more complex than that.

Useful information and user-friendly access to TARAhaat.com is critical to the success of TARAhaat. The "look-and-feel" of this service, and the range of its content, will break new ground since rural users have expectations that are quite different from those of their town cousins. TARAhaat is designed from the ground up to address the needs of its particular customers. To achieve this, an extensive house-to-house survey is providing detailed information on rural life and livelihood practices. The survey, conducted with support from UNDP and the Government of Madhya Pradesh covers some 20,000 households in 131 villages in the alpha and beta test areas.

The look-and-feel is carefully designed to attract and retain users of all kinds: farmers, traders, housewives, senior citizens, youth, and children. The primary interface will be both graphic (using specially designed pictures and icons that are attractive, colourful and animated) and voice-based to ensure that everyone, whatever the level of literacy, can quickly learn to take advantage of the system. Input will be by mouse click and, for the more literate, from the keyboard. Simple voice recognition software will in due course allow ordinary commands to be given to the computer. Use of headphones will enable users to receive voice mail messages or other information with privacy never before available in village life. In the pilots, to be conducted in MP and UP, the text will be available in Hindi and English. During the roll out, other languages will be added, according to the needs of each region.

The content must be accurate, timely and reliable from a technical as well as utility point of view. To achieve this, TARAhaat works in collaboration with the premier institutions in each field within the country. For example, the Health/Medical site results from a close cooperation with the All India Institute of Medical Sciences; Development Alternatives is responsible for the Environment section; and TARA and jaldi.com for the Marketing modules.

While net surfing has its own values and offers undeniable opportunities for serendipitous discovery, many of the users in rural areas will have quite specific information requirements and limited financial resources. For them, TARAhaat.com will facilitate the information acquisition process through simplified forms, point-and-single click procedures and voice commands. In fact, the software will use "pull technology" to bring up a screen that is individually tailored for each user, and contains the specific types of information desired by that user.

TARAhaat.com can primarily be characterised as a horizontal portal, but in several domains it will feature strong vertical elements, such as in medical services, commodity trade and distance education. Its central core is built around B2C (Business to Consumer) links, but it is expected quickly to generate growing B2B (Business to Business) and C2C (Consumer to Consumer) traffic. For example, the subsidiary portal TARAbazaar.com will provide urban and overseas consumers with direct access to village craftspeople, opening opportunities for direct marketing by millions of individual workers in the rural areas without their having to migrate to the city. Thus, large food processing companies such as Lever, PepsiCo and Dabur will be able to negotiate and monitor direct agreements with individual farmers for the purchase of tomatoes, peanuts or sugar cane. Value addition from timely delivery and savings from disintermediation can generate large revenues for seller, buyer and TARAhaat (which in effect becomes a new, more efficient intermediary).
 
 Access
The central focus of all TARAhaat activities will be on maintaining a rich and diverse portal, supported by effective delivery services. It will, however, take responsibility (generally through outsourcing) for whatever aspect of the business that is crucial to the outcome. In delivering a pragmatic communication and marketing solution to rural areas, TARAhaat.com will provide, where necessary, services beyond that of a portal. For example, it acts as an ISP until a location is connected to the Internet. It is a gateway to the world of information, a supermarket for goods, services and ideas, hyper-linking web sites on issues of relevance to the rural poor all over the world.
 
As in all such services, e-mail, on-line connection and chat rooms will be the major attractions, connecting local users to each other, to their husbands in the city and to their sons on the front. TARAmail is envisaged as an off-line service for last-mile delivery of e-mail. We can also expect the quick emergence of a variety of innovative adjunct functions peculiar to rural needs, such as transfers of cash remittances, land records and certificates often needed more expeditiously in village life than is possible with regular mail. Subject to legal restrictions, TARAhaat services will make these services available using the most effective communication methods available – text, graphics, voice or any other – to ensure that the level of literacy is no barrier to intelligent and value adding use of the Internet.
 
It will be many decades before village households are able to acquire their own computers, modems and telephone connections. In the TARAhaat business model, they don’t need to. TARAhaat will provide access to even the lowest income users by setting up local TARAdhabas (TARAkiosks – the rural version of cybercafes) where they can get connected to the Internet (and where necessary, help or coaching to navigate through it) for the payment of a small fee.
 
The cherry picking strategy of Indian ISPs has so far left the large rural market almost entirely without Internet connectivity. Where local connectivity is not available, TARAhaat will provide access via C-band satellite very small aperture satellite dishes(VSAT), which will be installed at strategic locations in the test area and will function as POPs (Points of Presence) – especially in those areas where a local telephone service exists. In due course, when GOI allows Ku-band service and as other satellite technologies are deployed, TARAhaat will migrate to the optimal low cost access solution. As part of the beta pilot, Hughes Escorts has committed to provide five dishes to be set up at selected locations in the test area.
 
During the pilot phase, the 20 TARAdhabas, some of which will also function as POPs, require the full complement of hardware to provide Internet connectivity including multimedia capability,scanning and a printer. Each of the TARAdhabas connected to one dish would also need to have a LAN type of network. To input and update content, another 10 stations would be needed for experts such as doctors, wholesalers/price researchers, local political leaders and others to interact with the clients of TARAhaat. Additionally, TARA control rooms would need to be set up in 10 different locations. Thus the beta test will require some 50 Pentium computers with the appropriate peripherals and supplies.
 
Fulfilment
TARAraths (TARAvans) will solve the problem of physical delivery of goods and services where courier services do not yet exist, which is the case for most villages in India. An order placed through TARAhaat.com will be passed on to TARAvendors (suppliers, dealers or agents of TARA-approved products) and to the local TARAvan franchise, which will pickup, deliver the items ordered and collect the payment.
 
Much of the information and intelligence on the TARAhaat.com screen is time-sensitive; it will have to be updated regularly. Weather and mandi (market) prices will have to be input daily, or even more frequently. Matrimonials, jobs and other advertisements will need to be changed every week. Healthcare chat rooms will involve current data on public health issues. A network of TARAscouts and alliance partners will continually update the content to keep the portal constantly renewed, fresh and vibrant.
 
A central part of the mission of TARAhaat is to create sustainable livelihoods in rural and peri-urban India. Sustainable livelihoods are created by sustainable enterprises – decentralised, technology-based mini-businesses that are environmentally sound and produce goods and services for the local market. The primary problem of such mini enterprises is that, to be profitable and sustainable, they need certain kinds of support systems: technology packages and after sales service, managerial/entrepreneurial skill development, marketing methods and understanding of access to credit and financing. To provide these supports, TARAhaat will deliver rural consultancy and mentoring services in the form of "TARAgurus", who will help mini enterprises make full use of the web-based services of TARAhaat.com.
 
Next to employment, education is probably the most unmet need of all in India. With rapid penetration of the media, particularly television, into rural communities, both the expectations and the possibilities for bringing knowledge to villagers are exploding. TARAhaat is working out arrangements with the Indira Gandhi National Open University, the National Open School and other educational institutions to use internet based communications for teaching, testing and certifying students in remote areas.
 
Payment for the different types of transaction made possible by TARAhaat will be largely by cash (which our research over the past 20 years shows to be more easily– though somewhat seasonally – available in rural and peri-urban areas than is commonly supposed). However, the TARAcard, which provides a highly prized photoID to each villager, will in time become a local credit card, particularly in dealings with the TARAdhaba and TARAvan. As the TARAhaat network expands, the TARAcard can become a more widely used method of payment for goods, services and financial transactions, possibly evolving into a smartcard with medical and other records of the resident on it.
 
Implementation
TARAhaat is being launched with limited financial capital from its promoters, TARA and Development Alternatives. As it grows, additional funds will be raised from public financial sources and private investors. Overall, 50% of the equity capital of TARAhaat.com is expected to belong to a not-for-profit foundation, the Sustainable Livelihoods Foundation. The objectives of the Foundation are to support science, policy advocacy and action through citizen groups to accelerate the processes of sustainable national development. The remaining equity will be used for raising the cash resources needed to expand operations and to provide incentives to staff and franchises (ESOP), necessary to build a global enterprise of this magnitude.
 
The growth of the TARAhaat network in terms of range of coverage and speed of implementation will benefit from the experience of the ubiquitous "public call offices" (PCOs) which have made the telephone a near-universally available service throughout India. Over the next five years, TARAhaat expects to have covered the bulk of the country, and expanded into neighbouring countries in the sub-continent. An agreement has already been reached with the Bangladesh Centre for Advanced Studies of Dhaka to franchise TARAhaat services to local entities in Bangladesh. Similar agreements are at an advanced stage of negotiations with the Sustainable Development Policy Institute in Islamabad, the equivalent Pakistani NGO.
 
The structure, functions, modus operandi and revenue generation from the operations of TARAhaat.com, the TARAdhabas, the TARAvans, the TARA-scouts, the TARAgurus and the TARAcards have been carefully worked out to ensure that each is a profitable activity.
 
The Competition
For the combination of services to be provided by TARAhaat, there does not currently appear to be any competition on the horizon. The success of TARAhaat will no doubt bring other players into the rural market, but it will be some time before they will be able to establish the field experience, the depth of understanding or the institutional links already acquired by the DA Group over the past twenty years.
 
The Revenue Streams
Revenues to TARAhaat will come from payments received for services, commissions on sales, fees for advertising and entertainment, royalties and other sources of earnings. All these will be structured to maximise the incentives for each participant in the TARAhaat network: the user, the TARAdhaba, the TARAvan, the TARAscout, the TARAguru and of course TARAhaat.com and its shareholders. Overseas franchises and consultancies in other developing countries will provide revenues in the future.
 
The revenue streams described above are sufficient to generate income for TARAhaat at a rate to enable it to grow rapidly and in due course to deliver shareholder returns. Rapid growth of the TARAhaat network will also contribute to fundamental, structural changes in the rural economy, an outcome that can only be good for business in particular and for the nation as a whole.

q by Ashok Khosla