Information Technology for Development

ISSN: 0268-1102 (Print) 1554-0170 (Online) Journal homepage: www.tandfonline.com/journals/titd20

Market development at the bottom of the

pyramid: examining the role of information and
communication technologies

Monideepa Tarafdar, Prashanth Anekal & Ramendra Singh

To cite this article: Monideepa Tarafdar, Prashanth Anekal & Ramendra Singh (2012)
Market development at the bottom of the pyramid: examining the role of information and
communication technologies, Information Technology for Development, 18:4, 311-331, DOI:
10.1080/02681102.2012.690172

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Published online: 17 Jul 2012.

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Information Technology for Development
Vol. 18, No. 4, October 2012, 311 –331

Market development at the bottom of the pyramid: examining the role of

information and communication technologies
Monideepa Tarafdara∗ , Prashanth Anekala and Ramendra Singhb
a
Department of Information Operations and Technology Management, College of Business and
Innovation, The University of Toledo, 2801 W. Bancroft Street, MS# 103, Toledo, OH, 43606, USA;
b
Marketing Group, Indian Institute of Management Calcutta, Kolkata, India

This paper addresses the research question, “How can the use of information and
communication technology (ICT) enable development of markets at the bottom of the
pyramid (BOP)?” Integrating ideas centered on the threefold role of ICT (automate –
informate–transform), market mechanisms, and agency freedom aspects of ICT-enabled
development, we examine how (1) ICT facilitate development of market mechanisms
at the BOP, (2) market mechanisms enable economic and social benefit outcomes for
BOP markets and members, and (3) complementary conditions facilitate or hinder ICT-
enabled market development. The findings are based on qualitative primary data from
interviews with 27 BOP individuals from India, and from published and secondary
examples. Theoretical contributions and implications for practice and further research are
discussed.
Keywords: bottom of the pyramid; ICT-enabled market development; automate; informate;
transform; agency freedom

1. Introduction
The bottom of the pyramid (BOP) is widely considered to include people with incomes of less
than US$2 a day (Prahalad & Hammond, 2002). Over four billion people belong to this econ-
omic class, primarily from countries in Asia, Africa, and South America (Hammond, Kramer,
Katz, Tran, & Walker, 2007). A principal problem they face is separation from formal
markets, and consequent to that, inability to purchase essential goods and services, due in
part, to unavailability (Prahalad, 2005) and non-affordability (Karnani, 2007). Traditionally,
means of addressing this problem have largely included poverty-alleviation and developmental
assistance from government and non-government agencies, the corporate sector, and developed
countries (e.g. Walsh, Kress, & Beyerchen, 2005).
Emerging ideas suggest that enabling the creation and development of markets at the BOP is
potentially an important mechanism for tackling this problem. Markets at the BOP are those that
include consumers or producers (or both) that belong to BOP communities. These markets differ
from the more formal and mainstream markets in a number of ways. First, they consist of phys-
ically far-flung communities and poor transportation infrastructure for reaching them (Sheth &
Sisodia, 1993). Second, they are characterized by an absence of formal price and value indicators
for products and services, such as stock and price indices. Third, they are largely outside the
purview of operations of formal financial and regulatory institutions, and four, they do not
have access to information and media outlets (Hammond et al., 2007; Viswanathan & Rosa,
2007). These conditions affect both consumers and producers at the BOP.

∗
Corresponding author. Email: monideepa.tarafdar@utoledo.edu
Sajda Qureshi is the accepting Editor-in-Chief for this article.

ISSN 0268-1102 print/ISSN 1554-0170 online

# 2012 Commonwealth Secretariat
http://dx.doi.org/10.1080/02681102.2012.690172
http://www.tandfonline.com
312 M. Tarafdar et al.

The remote location of most BOP communities makes physical distribution of goods and ser-
vices costly and unattractive for large corporations; BOP consumers have been considered phys-
ically unreachable (Prahalad & Hart, 2002). These markets also tend to have “informal”
exploitative intermediaries who further raise costs (Prahalad & Hammond, 2002). BOP produ-
cers find it difficult to connect to potential customers, adopt appropriate pricing methods, and
distribute their goods and services, due in part to lack of information and lack of financing.
This is a critical reinforcer of the poverty trap (Karnani, 2007). Well-functioning markets at
the BOP are thus necessary, so that corporations find it feasible and attractive to sell to commu-
nities at the BOP and BOP consumers have access to goods and services. They are also impor-
tant, for BOP producers, to find customers for their products and raise their income. Market
creation and development are thus important and critical challenges BOP communities are
facing.
Information and communication technology (ICT) can be used to potentially overcome these
conditions characterizing BOP markets. For instance, physically remote and geographically
fragmented markets can be reached by distributing products and services electronically, as illus-
trated by electronic delivery of low-denomination cell-phone talk-time to remote rural customers
in the Philippines (Anderson, 2006) and healthcare services to BOP markets in India (Govindra-
jan, 2010). Lack of information about crop prices can be partly rectified by providing electronic
databases of food grains and livestock-related products and prices to farmers, which can be
accessed through cell phones (Anderson, 2006). The research question thus addressed in this
paper is, “How can the use of ICT facilitate development of markets at the BOP?”
The literature on ICT-enabled development has focused largely on the role of ICT interven-
tions in the delivery of social services by facilitating development of healthcare, education, and
community/government services and has identified issues such as lack of literacy, affordability,
and ICT-intermediated information flows as facilitators of the effectiveness of such interven-
tions (Braa, Monteiro, & Sahay, 2004; Madon & Sahay, 2002; Qureshi, 2005; Seshagiri,
Sagar, & Joshi, 2007). The BOP marketing literature identifies information dissemination chal-
lenges specific to BOP markets. Theoretical understanding of how ICT can facilitate develop-
ment of efficient markets at the BOP, and other related outcomes for BOP communities, is
missing in both categories of the literature. We therefore believe that it is worthwhile and inter-
esting to explore why and how ICT can help develop markets at the BOP. Our findings are drawn
from the primary qualitative data from interviews with 27 BOP individuals and from secondary
case studies and literature examples of ICT application to BOP communities.
The paper makes a contribution to the literature that examines the role of ICT in facilitating
transformative socioeconomic processes (Avgerou, 2008). Specifically, we present a better
understanding of how ICT facilitates creation and development of markets, and thus enables
positive social and economic outcomes at the BOP. In addition, we provide theoretical develop-
ment for linking the automate – informate –transform aspects of ICT with key market mechan-
isms, examined in the context of BOP markets.
We first provide the theoretical background of key BOP market characteristics, the different
roles of ICT, and agency aspects of ICT adoption in developing countries. We next describe the
methods employed in this study. We then present the findings of the study, following an inter-
pretive approach. We conclude with a discussion of contributions and implications.

2. Theoretical background
This section presents the theoretical background and context for our study. On examining the
literature, we find a number of relevant streams of research potentially concerned with our
study and research question. These are, among others, markets and market mechanisms in
 Information Technology for Development 313

BOP communities, ICT adoption in a developmental context, agency freedom and development,
and different roles attributed to ICT and their potential application to markets at the BOP. We
describe these in the following sections.

2.1 Market mechanisms in BOP communities

A market is “an arrangement whereby buyers and sellers interact to determine the prices and
quantities of a commodity” (Samuellson & Nordhaus, 1992). “Market mechanisms” are means
through which consumers and producers interact to determine the conditions (i.e. price and
frequency) of exchange, and appropriate/efficient quantities of producing goods and services.
The three primary functions of a market are matching of buyers and sellers, facilitation of
transactions, and providing institutional infrastructure (Bakos, 1998). “Matching of buyers
and sellers” includes search for entities to buy from or sell to, identification of product
offerings, and price discovery. “Facilitation of transactions” includes logistics, transfer of pay-
ments, and facilitation of credit and buyer – seller communication. “Institutional infrastructure”
takes care of enforcement of legal and regulatory requirements. Formal markets accomplish
these functions through a number of mechanisms. Availability of information sources such
as stock prices, commodity price indexes, and media outlets enables matching of buyers
and sellers by allowing price setting and discovery and by making product, producer, and
consumer information available. Facilitation of transactions is made possible through avail-
ability of transportation and logistics infrastructure, platforms for buying and selling such
as shopping malls (Rochet & Tirole, 2006), and financial credit. Institutional infrastructure
is facilitated by regulatory institutions that oversee and govern issues relating to stock
market operations, financing/banking, and market monopoly (e.g. Grewal, Chakravarty, &
Saini, 2010).
Communities at the BOP are plagued by three principal problems, each of which makes
accomplishment of these mechanisms, and indeed creation and development of BOP
markets difficult (Hammond et al., 2007; Viswanathan & Rosa, 2007). Firstly, they are
characterized by restricted physical access and poor infrastructure, since a large percentage
of BOP communities are located in far-flung rural areas with poor transportation facilities.
From the point of view of BOP markets, this makes physical matching of buyers and sellers
difficult, and hampers logistics and facilitation of payments. Secondly, they suffer from
restricted information access, wherein poor communication infrastructure makes flow of
information between consumers and producers difficult. This problem is compounded by
low levels of education and exposure to media and high levels of dependence on local
and confined community and social networks (Viswanathan, Gajendiran, & Venkatesan,
2008). For BOP markets, this lack of information hampers determination of which pro-
ducts/services are available (from BOP producers) or desired (by BOP consumers), and
what their price should be. It thus restricts facilitation of transactions. Third, BOP commu-
nities suffer from regulatory deficiencies, since many of their governing mechanisms are
informal in nature, and strongly influenced by sociopolitical factors such as religion and
local community (Sheth, 2011). This makes enforcement of contracts and regulatory
requirements in BOP markets difficult, as a result of which institutional and corporate enti-
ties are reluctant to operate in them.
A series of studies (e.g. Sridharan & Viswanathan, 2008; Viswanathan et al., 2008) suggests
that poor consumers lack awareness of their market-related rights such as the right to information
about products they buy and the right to have proof of purchase and thus cannot make effective
shopping choices. BOP producers similarly often fail to fully assess the marketplace before start-
ing new businesses and to identify price points for their products and services. Research from a
314 M. Tarafdar et al.

developmental perspective (Rosa et al., 1999; Viswanathan, 2007) suggests that marketing and
market development initiatives should integrate the economic and social relationships among
buyers and sellers, co-opt consumers as co-producers to better understand their needs, and
utilize local human resources and skills.
Based on the aforementioned points, market development at the BOP is thus expected to lead
to beneficial outcomes for BOP communities and indeed has been a focus of government policy
in emerging economies (Sheth, 2011). For instance, improved facilitation of transactions and
improved matching between buyers and sellers leads to increased consumption choices for con-
sumers (Prahalad, 2005), as well as higher income generation opportunities for producers (Pitta,
Guesalaga, & Marshall, 2008; Prahalad, 2005). Similarly, formal institutional infrastructure
facilitates improved access to credit for consumers and producers.

2.2 ICT adoption in a developmental context

The literature has examined the developmental potential of ICT, studying the association of
information systems (IS) with social and economic change in developing countries. For
example, ICT has been used as a means to access socially and economically furthering services
such as healthcare services, e-government, and microfinance (Braa et al., 2004; Cechini & Scott,
2003). Low-cost computing integrated into rural and low-income urban schooling can improve
educational outcomes through multimedia applications (Brewer et al., 2005). However, most
members of the BOP cannot afford technology that is costly and cannot operate technology
that is complex. Lack of literacy and affordability are therefore two important hurdles
to access to technology (Seshagiri et al., 2007). Failure to consider the local sociocultural
dynamics and community norms, and lack of sensitivity to needs in terms of their daily schedule
and work practices are also reasons why intended users of development-related ICT in rural
areas may not use them (Brown & Brown, 2009; Roode, Speight, Pollock, & Weber, 2004;
Seshagiri et al., 2007).
ICT-enabled development through private enterprise, through larger organizations or
through local entrepreneurship at the BOP is generally considered beneficial, since it can
provide services and goods to BOP consumers and at the same time, either increase the
profits of the private sector or provide economic benefits to local BOP producers (Prahalad,
2005, p. 3; United Nations Development Project, 2004). Such a view emphasizes the roll out
of ICT for development projects through local entrepreneurship at the BOP. However, such a
model overemphasizes the “consumer” aspect of the BOP while not paying adequate attention
to their producer role (Karnani, 2007). Failure to adequately recognize the problems of produ-
cers as well as consumers can lead to unsuccessful ICT for development initiatives as illustrated
by Akshaya, where telecenters failed to have enough paid subscribers because BOP entrepre-
neurs who ran the telecenters could not manage a trade-off between their social development
role and financial stability (Kuriyan et al., 2008).

2.3 Role of intermediaries in developmental initiatives

Social structure has been described in terms of the network metaphor where different partici-
pants, such as citizens, government, and civic bodies, constitute the different nodes (Castells,
1997). There are linkages between the nodes in terms of feedback mechanisms and channels
for information exchange. Development then takes place when participants, or nodes, have
access to and can share information from diverse sources and can thus participate as actors in
development-related decision-making. Such information flows have been used, for example,
to explain grassroots social change in response to state-led repression (Castells, 1997).
 Information Technology for Development 315

Intermediaries can play a role that is conducive to directing and shaping the flow of information
between different nodes. Such intermediaries can be either external organizations such as non-
government organizations (NGOs) (Madon & Sahay, 2002), or local elites such as village elders
who have social and cultural power (Powell, 2001). Intermediaries can play a positive role in
developmental initiatives by enabling the flow of information between government, develop-
mental agencies, and local citizens. For instance, in a study of developmental initiatives in an
urban slum (Madon & Sahay, 2002), we found that locally generated information covering
slum-related issues and circulated by NGOs in the form of vernacular newspapers enabled
slum dwellers to keep abreast of local problems and to react to them through informed public
debate and follow-up action. Information about government services and infrastructure, which
was needed by local participants to be aware of their entitlements, was similarly available in
a way that could be understood by them. In this way, slum dwellers could participate in an
informed manner, in formulation of developmental policies and programs that affected them.
However, intermediaries can also utilize their power to influence the course and outcomes of
development projects in ways that are not necessarily beneficial to the people who are supposed
to benefit from such projects (Kothari, 2001; Mosse, 2001; Powell, 2001). For instance, in appar-
ent warps of the participative approach, they have been known to facilitate alignment of goals of
developmental projects with those of the service providers/project custodians rather than with
those of BOP participants, by directing the nature of information flow that takes place
between the former and the latter (Mosse, 2001) Intermediaries can thus play an ambivalent
role in developmental initiatives.

2.4 Agency freedom and development

Many applications and systems, such as those used in e-government or e-health initiatives, have
been transferred to the less developed nations from the more advanced economies, under an
implicit assumption that they can be ported “as is” without involvement of potential users,
who are often perceived as passive receivers of these innovations (Walsham, 2001). Recent
work, however (Zheng, 2009), emphasizes the notion of “agency” of ICT users on the basis
of the idea that their aspirations and needs are considered important factors in determining
the legitimacy and eventual impact of developmental initiatives. This approach suggests that
the agency freedom of ICT, that is, their freedom to “bring about the achievements that they
value” (Sen, 1992, p. 57), needs to be considered when evaluating and implementing ICT pro-
jects in developing countries. There are two important implications of this approach.
First, for users in developing countries to use an application or system, it should meet their
needs and expectations in terms of information processing requirements and cultural and societal
preferences and customs, and should involve their participation or involvement as actors (rather
than passive recipients) in the adoption process (Zheng, 2009). Second, the potential benefits of
an ICT development initiative should enable the actors to achieve goals that they value (Sen,
1992). While the former has been examined (e.g. Madon, 2004; Madon & Sahay, 2002), the
latter has not been studied in detail yet. We thus suggest that ICT adoption as a development
initiative can be viewed as a part of an ensemble of technology, processes and interactions
(Gerhan & Mutula, 2007), its objective being to generate ICT-enabled societal and economic
impacts of value to the participants for whom the initiative is deployed.
On the basis of the notion of the agency of the BOP participant, we expect the success of
ICT-enabled market development to be determined by the extent to which BOP consumers
and producers find that the associated applications meet their market exchange needs, provide
relevant functionality, and ultimately help them realize aspirational outcomes of value to them.
316 M. Tarafdar et al.

2.5 Roles of ICT and potential application to BOP markets

Research on how ICT can improve business processes and facilitate transactions among
entities (i.e. individuals, departments and organizations) has conceptualized three roles of
ICT – automate, informate, and transform (e.g. Armstrong & Sambamurthy, 1999; Weill,
1992). “Automate” looks at ICT as a means for automating repetitive, structured and high-
volume information processing. “Informate” provides decision-support information to senior
management (informate-up) and other employees (informate-down). The “transform” role
looks at fundamentally redefining processes and relationships within an organization or
between organizations, by facilitating new forms of information transfer. ICT, therefore, substi-
tute for human effort (automate), augment human decision-making (informate), and restructure
human tasks or processes (transform).
Given the information and exchange-related difficulties in developing markets at the BOP,
and the three roles of ICT in enabling information processing and exchange efficiencies, the
three ICT roles can potentially enable market mechanisms at the BOP. For instance, the auto-
mate role, which increases the efficiency of information processing, can enhance the efficiency
and reduce the cost of processes of exchange between buyers and sellers. BOP markets have
been characterized by “missing information strategies” (Burke, 1996; Prahalad, 2005)
whereby BOP buyers are not aware of available products and BOP sellers are not able to identify
buyers and price points for their goods. The informate role can be utilized to provide timely and
correct information for buyers and sellers. While there are examples of using ICT to provide
price information of products to poor producers in the fisheries or agricultural sectors, for
instance (Abraham, 2006; Eggleston, Jensen, & Zeckhauser, 2002), ICT-enabled market devel-
opment has not been examined in any conceptual detail.
Our examination of the literature thus reveals the following. First, market mechanisms at the
BOP are inefficient and underdeveloped, and while there is acknowledgment that the application
of ICT could potentially address these conditions, ICT-enabled market development has not
been examined in detail. Second, the sustained success of ICT interventions in developing
countries depends on the presence of complementary conditions, one of them being the extent
to which such interventions are sensitive to local and culture-specific social needs and power
structures. Third, we find that while agency freedom of participants has been suggested as a
desirable outcome of developmental initiatives, the role of ICT in enabling such freedom has
not been examined. On the basis of these ideas, we address our research question by focusing
on the following sub-questions: (1) How does ICT facilitate development of market mechanisms
in BOP markets?, (2) How does market development lead to benefit outcomes at the BOP, and
(3) How do complementary conditions influence ICT-enabled market development? We use the
automate – informate – transform classification of ICT roles applied to markets in BOP commu-
nities as the initial framework and sensitizing lens for our examination of the research questions
and collection of data.

3. Methods and data

We adopted a qualitative research design following interpretive principles (e.g. Walsham, 2006).
We submit that the appropriateness of our design is based on our research question, which seeks
to understand how ICT can enable market development at the BOP. Our examination of the rel-
evant literature as described in the previous section was used as the initial theoretical scaffolding
and guide to our data collection, in accordance with the accepted role of theory in interpretive
research designs (Walsham, 2006). Accordingly, our data primary and secondary data collection
centered around roles of IT, market mechanisms and agency aspects of ICT adoption in devel-
oping countries.
 Information Technology for Development 317

First, we conducted interviews with BOP individuals (consumers and producers). We

collected interview data from 27 individuals from India, as shown in Table 1. The BOP intervie-
wees had a daily income of less than US$2, education levels less than 10th grade, and occu-
pational profiles that included those of household helpers, migrant daily wage earners,
rickshaw pullers, small shop owners, street vendors, etc. These classification criteria for BOP
are consistent with the literature (e.g. Prahalad & Hammond, 2002), and with those included
in the United Nations Human Development Index that suggests income and education to be
important factors indicating poverty. The questions, based on the theoretical background
presented earlier in this paper, were framed to understand how and why – (1) their use of
ICT (primarily mobile phones and Internet-based applications) facilitated market mechanisms
for them, (2) the development of markets resulted in benefit outcomes for them, and (3) possible
contextual conditions influenced their adoption ICT that enabled market mechanisms. Typical
questions from the interview schedule are included in Table 1. Interviews, lasting between
15 and 30 min, were audio-recorded, transcribed, and coded.
Second, we reviewed examples from the IS literature for social and economic initiatives
targeted at rural populations in general, and BOP communities in particular. Details of journals
and keywords for articles selected are described in Table 1. About 30 websites and white papers/
reports were additionally analyzed to explore in greater depth important examples from the
review.

Table 1. Methods and data.

Interviewees (27)
Primary data
BOP consumers (16)
BOP product/service providers (11)
Secondary data
Representative list of journals
IT for Development, Journal of IT,
MIS Quarterly, Information
Systems Research, Information
Systems Journal, Electronic
Journal of IS in Developing
Countries, The Information
Society, IT and People, Sloan
Management Review, Harvard
Business Review, California
Management Review, IEEE
Technology and Society
Demographic details Sample questions
Examples: carpenter, housemaid, 1. What they consumed and
courier delivery, contract where they bought
laborer, watchman, rickshaw 2. How they financed their
puller purchases
3. How they knew about
availability of products
4. Why and how they used
ICT
Examples: vegetable and fish 1. What they produced
seller, cycle repairer, roadside 2. How they found customers
eatery stall owner, seller of old 3. How they set prices
clothes 4. Why and how they used
ICT
Representative keywords Number of articles and
reports
BOP, ICT for social and economic Over 70 articles and 30
development, e-government, reports to examine in depth
ICT at BOP important examples from
the review
318 M. Tarafdar et al.

4. Findings
We interpreted the data in a grounded (Strauss & Corbin, 1998) and exploratory manner.
Figure 1 shows the organizing framework for our findings, where we examine our research ques-
tion through the three sub-questions enunciated in Section 2. Specifically, we explain how (1) the
role of ICT facilitates market development at the BOP and (2) ICT-enabled market development
is associated with benefit outcomes. We also analyze the role of complementary conditions in
facilitating or inhibiting ICT-enabled market development.

4.1 How ICT facilitates market development at the BOP

We find that automate, informate, and transform roles facilitate market development at the BOP,
as described in the following sub-section.

4.1.1 How the “automate” role of ICT positively influences market development at the BOP
ICT-enabled automation increases the speed and accuracy of information processing in business
processes. ICT implementation at milk collection centers operated by the National Dairy Devel-
opment Board (NDDB) of India provides an illustration in the context of the BOP (Bhatnagar,
2000). NDDB comprises over 100,000 village dairy cooperatives that collect milk from rural
farmers (in this case, BOP producers of milk). Traditionally, manual processes of milk collection
(primarily weighing and fat content determination) were time-consuming and inaccurate, and
hence open to malpractice and underpayment. Farmers waited for hours for milk collection
and several days for payment. With the NDDB’s implementation of a computerized milk collec-
tion system, weighing, fat content determination, and payment calculation together take 20 s for
each farmer. Further, NDDB analyzes data from individual transactions to forecast milk collec-
tion, track seasonal variation in the fat content of milk and provide price- and quality-related
information to the farmers.
In other examples from rural Mexico and Guatemala (Parikh, 2009), inspectors in coffee-
producing farmers’ cooperatives use mobile phones to increase the efficiency and accuracy of

Figure 1. Research findings.

 Information Technology for Development 319

their transactions with farmers (in this case, BOP producers of coffee). These inspectors rep-
resent respective coffee-buying organizations. Traditionally, inspectors manually recorded
their observations about coffee quality and farm practices (from visual inspection of coffee
plants and conversations with farmers) in a lengthy form. These handwritten records were
often lost, leading to conflict between farmers and inspectors. Further, farmers would often ques-
tion their authenticity. An application called Digital Internal Control System was implemented
to run on mobile phones. Inspectors used these phones to record and upload to a web-based data-
base, not just text, but also visual and voice data on each inspection. Each transaction between
the inspector and farmer (i.e. each inspection) is now faster, traceable, and recorded in greater
richness. The grading process is thus more accurate. This has enabled the inspectors to institute
reward mechanisms tied to farm-level quality.
As these examples show, in the BOP context, the “automate” role primarily improves
facilitation of transactions mechanism. It does so by enabling faster and more efficient execution
of processes such as logistics of transfer of goods between producers and buyers at the BOP,
transfer of payments, and quality control. It also provides more accurate communication
between BOP producers and buyers of their goods.

4.1.2 How the “informate” role of ICT positively influences market development at the BOP
Restricted access to information is an important problem that plagues communities at the BOP.
In their “informate” role, ICT provides access to valuable, timely, and accurate information to
BOP consumers and producers.
Telecenters provide a good example. Telecenters are shared public facilities that rely on
computers and the Internet to make available information and communication services
(Mukerji, 2008). In developing countries, they are seen as rural information or knowledge
centers that provide access to details of products and services (for BOP consumers) and possible
selling prices (for BOP producers) (Mukerji, 2008). For example, BOP consumers use
telecenters to buy railway and bus tickets and electronically purchase talk-time for prepaid
mobile phones (Schware, 2009). BOP producers use them for price discovery, as in the case
of “Janmitra” telecenters, where farmers from rural India can access information on grains
and other commodity prices in international markets so that they can determine the prices at
which to sell their produce (Gorla, 2009).
ICT, in the informate role, enables matching of buyers and sellers at the BOP. For instance,
the “Nemmadi” telecenter project in the state of Karnataka in India has been successful in
matching buyers and sellers using an ICT-based platform (Gorla, 2009). It functions as a
business-to-consumer platform for insurance, travel, and mobile phone service providers
selling to BOP consumers. In the Indian state of Kerala, fishermen at sea (i.e. BOP producers)
use their mobile phones to get in touch with potential buyers, so as to assess demand and
determine prices. This results in matching of buyers and sellers and helps fishermen decide
on quantities of fish that they should catch (Jensen, 2007).
From primary data, we find that mobile phones have enabled BOP producers (or service
providers) to reach out to buyers (or clients) more effectively. A contract laborer working as
a carpenter mentioned, “The contractor calls me on my mobile phone and informs me about
the next job to be done. He can now contact me easily and I get all the required instructions
on the phone.” A vegetable and fruit seller mentioned, “Many of my customers place orders
on the phone or ask me to get specific vegetables. They also call to enquire about vegetable
prices. After I started taking orders on the phone, my sales have gone up substantially.”
Similarly, BOP consumers can access sellers more easily. A bicycle mechanic mentioned,
320 M. Tarafdar et al.

I use my mobile phone to get information on spare parts and prices for second hand spare parts. Since
second hand parts are not always available, it is helpful to know which seller has them before
actually going to buy them in the market. Based on this information, I can choose the merchant.
As these examples show, in the BOP context, the “informate” role of ICT primarily facilitates
the “matching of buyers and sellers” market mechanism. It does so by enabling BOP producers
(consumers) to find potential buyers (sellers), BOP producers to accomplish price discovery, and
BOP consumers to determine availability of product offerings.

4.1.3 How the “transform” role of ICT positively influences market development at the BOP
The “transform” role of ICT significantly alters or reengineers business processes or relation-
ships between business entities. In the BOP context, inherent difficulties in developing
markets present considerable scope for ICT-enabled transformation, in processes for exchange
of goods and services, and in relationships between producers and consumers.
The “e-Choupal” initiative from ITC provides a good example of this role. The “e-Choupal”
is a privately operated “grain-exchange” that brings together the BOP producer (farmers in rural
India producing food grains and commodities) and a corporate food-grain buyer (ITC Limited)
(Upton & Fuller, 2004; World Resources Institute, 2003). It has transformed the practice of pro-
curement of agricultural produce in rural India. Traditionally, farmers have been dependent on
“mandis” (i.e. government-mandated markets for transactions involving agricultural produce)
for selling food grains. Mandis are plagued by three primary problems – exploitative control
by commission agents, very little transparency in the pricing mechanism, and highly inefficient
collection processes resulting in spillage, wastage, and improper weighing of produce. The BOP
producer (the farmer) has no control over the price, which is often lower than prevailing prices
on international exchanges. The “e-Choupal” is an ICT-enabled initiative that provides (1) a
physical place for farmers to sell their produce to ITC, (2) an Internet-based telecenter where
farmers have access to current food-grains prices on international exchanges and other local
grain markets, and (3) analytics-based quality control processes. In the context of (1) and (2),
we find that farmers are able to decide, on the basis of prices, whether or not they want to
sell their produce to ITC. (1) and (2) are thus examples of how the transform role enables the
matching of buyers and sellers mechanism. In the context of (3), we find that ICT-enabled
grain acquisition and tracking provide an incentive for the farmer to grow high-quality
produce. An enterprise resource planning system is used to keep track of the quality and quantity
of grains procured from each farmer. Quality for each farmer is assessed through a unique identi-
fication number, which is given to the farmer, who in turn uses it during his transactions. Farmers
producing grains of inadequate quality are then provided education and guidance on seeds, fer-
tilizers and farming techniques, through the telecenter, while those with good-quality grains are
encouraged to sell more to ITC. (3) is thus an example of how the transform role enables the
facilitation of transactions mechanism.
Another example is that of process reengineering in the microfinance sector in BOP markets,
where the “transform” role has significantly improved the facilitation of transactions mechan-
ism. Field loan officers of microfinance organizations (e.g. SKS Microfinance in India) use
smart cards and Internet-based and remote-access-enabled loan management applications so
that loans for BOP customers can be quickly approved (Cecchini, 2003). Microfinance organiz-
ations are also considering cell-phone-enabled applications that customers can use to keep track
of their balances and payments (Parikh, 2009).
The “transform” role has also enabled market development at BOP by providing insti-
tutional infrastructure to market mechanisms. In India for instance, semi-independent micro-
finance groups called self-help groups (SHGs) have been active in many rural areas. These
 Information Technology for Development 321

groups collectively save money that is then given to group members as loans on a need basis. Inter-
est rates vary with loan amounts, increasing the group’s corpus. SHGs are usually supported by
local NGOs and farmers. Since SHGs provide physical access to remote areas ideally, banks
and financial institutions would also find it attractive to work with them. However, poor record
keeping and lack of internal control mechanisms within SHGs have hampered collaboration.
An application called “Self-Help MIS,” jointly developed by Ekgaon Technologies (a technology
firm) and the Covenant Centre for Development (an NGO), was implemented by a network of
SHGs in the Indian state of Tamil Nadu. This application runs on mobile phones and enables auto-
mated capture and storage of data and improved record keeping, thus improving the speed and
accuracy of credit eligibility assessment of SHG members. These improvements have provided
an infrastructure for internal control and regulatory compliance by the SHG, making it attractive
for banks and other financial institutions to collaborate with it (Parikh, 2009).

4.2 How market development at the BOP leads to benefit outcomes

Our data show that market development through ICT-enabled market mechanisms leads to
benefit outcomes for BOP markets and individuals.

4.2.1 Benefit outcomes for BOP markets

For BOP markets, outcomes include reduced cost of transactions, increased information sym-
metry between producers and consumers (when either or both are at the BOP), and increased
productivity. These are described as follows.
Reduced cost of transactions: Cost of transactions is the cost incurred in making an economic
exchange between the producer and consumer of goods/services. Components of this cost
include, among others, search, distribution, marketing, commission, and financing costs
(World Resources Institute, 2003). Markets at the BOP have high cost of transactions due to geo-
graphical dispersion and cultural heterogeneity (that increase marketing and distribution costs),
low purchasing power of consumers (that increase financing and distribution costs), and
inadequate transportation and communication infrastructure (that increase search and distri-
bution costs) (Karnani, 2007). Improved facilitation of transactions made possible by ICT has
reduced cost of transactions by reducing time and human labor required to perform business pro-
cesses relating to exchange of goods and services. In the case of NDDB’s milk collection centers,
ICT usage for tracking and controlling collection has reduced process and waiting time and has
led to fewer errors in generating milk inventory and payment information. Similarly, the use of
mobile phones by the farmer cooperatives in Mexico and Guatemala have increased process
speeds and minimized process errors. Improved matching of buyers and sellers has reduced
cost of transactions by eliminating intermediaries and the associated search costs for producers
and buyers, and brokerage and commissions paid to middlemen, as illustrated by the e-Choupal
initiative. ICT has also enabled cost-effective distribution of information-based goods such as
cell-phone calling cards, to consumers at the BOP, as illustrated by Smart Communications, a
telecommunication company in the Philippines, (Anderson, 2006). One of our interviewees, a
seller of fish, mentioned,
Before I got my mobile phone, many times the expensive fish would go waste because there wasn’t
anyone to buy them. Now, my customers call on my mobile phone to place specific orders for such
fish, which I then buy.
A vegetable seller echoed similarly, “now I have better information on what my standing cus-
tomers want and I don’t have to throw away vegetables because no one bought them.”
322 M. Tarafdar et al.

Particularly for BOP producers of goods with short shelf lives, ICT-enabled matching of buyers
and sellers leads to reduced transaction costs.
Increased information symmetry: Because of lack of reliable information, BOP consumers
do not have information about possible goods and services they may have access to and BOP
producers may not be aware of customers, prices, and demand levels for their goods. As illus-
trated by the e-Choupal example, improved matching of buyers and sellers enables BOP pro-
ducers and consumers to access reliable information about the other transacting entity and
about products and prices, through, for example, the Internet, telecenters, and mobile
phones, thus creating information symmetry. In the e-Choupal initiative, for instance, price
discovery for grains happens in the village itself, through the Internet-based telecenter,
which means that the farmer knows the price well in advance of the actual sale. This
market benefit outcome leads to a BOP member benefit outcome as explained in the next
subsection.
Increased productivity: Partly because of high costs of transactions and partly because of
lack of availability of information, businesses that operate at the BOP put in more resources
(monetary and human) and effort for relatively less output. For BOP producers, improved facili-
tation of transactions and better matching of buyers and sellers have thus led to productivity
improvements by reducing resources required for executing processes relating to exchange of
goods and services. Similarly, for BOP consumers, the ability to execute transactions such as
purchasing tickets and accessing government services through telecenters eliminates the need
to travel long distances, thus improving productivity.

4.2.2 Benefit outcomes for BOP members

Outcomes for BOP consumers and producers include, as depicted in Figure 1, innovations in
work/business practices, access to products and services, access to credit, opportunity for
employment and entrepreneurship, poverty reduction, and social inclusion. We note that these
outcomes enable BOP consumers and producers to act on the pursuit of personal values and
objectives. In this context, we find that access to products and services and access to credit
helps them make informed consumption decisions in line with their preferences and values.
Innovations in work/business practices enable producers to improve the quality of their oper-
ations by providing decision-support information. Opportunity for employment and entrepre-
neurship, poverty reduction, and social inclusion enable them to accomplish objectives such
as improved quality of life and educational chances. We note that these benefits are not indepen-
dent of one another. For instance, employment opportunities and resulting financial betterment
may lead to poverty reduction. Individually and taken together, these benefits help enhance their
agency freedom by furthering them toward interests and goals they value and aspire to. We
describe and explain these benefits as follows.
Innovations in work/business practices: We find that the market mechanisms of matching
buyers and sellers and facilitation of transactions provide producers at the BOP with relevant
information that enables innovation and informed decision-making in their work and business
processes. A key component of the “e-Choupal” initiative has been the education of farmers
in rural India on fertilizers and farming techniques, through the e-Choupal telecenter. Such gui-
dance provides developmental information that farmers find valuable, because it aids in buying
decisions for better seeds and fertilizers (World Resources Institute, 2003), which addresses
farmer’s aspirational needs for producing crops of higher quality. In another example,
Manobi, a mobile data services operator in Senegal uses remote wireless access and SMS tech-
nology via cell phones to provide weather reports to fishermen. Fishermen use this information
to record their departures and estimated times of return. This time log is used to alert local fishing
 Information Technology for Development 323

unions to possible safety and rescue actions required to be taken if a fishing boat fails to return on
time. This sort of decision support has improved the working conditions and safety of fishermen,
both of which are valued by them (Manobi South Africa, 2012). We found that the use of mobile
phones enables BOP shopkeepers to innovatively identify goods that that are likely to sell in
BOP communities, as mentioned by a BOP shopkeeper– “I call my friend (also a shopkeeper)
in the city to find out about some of the fast moving products. Based on that information, I order
my products, they sell fast.” Ordering processes are thus more efficient and there is less waste of
inventory and better profits.
Access to products and services: ICT-enabled initiatives have provided BOP consumers
with access to products and services. Traditionally, consumers at the BOP have found it dif-
ficult to access essential goods and high product variety, because of lack of matching between
producers and sellers and high cost of transactions (Karnani, 2007). Moreover, consumers
often have aspirational needs for certain products and services such as popular packaged
snacks, branded personal hygiene products, or real-time sports updates. The market mechan-
isms of matching of buyers and sellers and transaction facilitation have provided improved
physical access to products and services, for BOP consumers. For example, ITC has leveraged
its physical infrastructure for buying grains to create “Choupal Saagars,” which are rural
malls. These are used as a distribution and retail channel, not only for selling seeds, fertilizers,
and crop insurance and life insurance to farmers, but also products such as branded soap and
toothpaste farmers want to use (Vachani & Smith, 2008). In our interviews, a BOP store-
keeper mentioned –
I get information about new products and services through SMS [advertisement] sent from the
mobile company [service provider]. Some of these are the same that I hear customers saying they
want . . . . . . I order it and sell it in the store. I know of other shopkeepers who have started have
started doing the same.
A BOP mobile phone user mentioned “I get live SMS scores of cricket matches on my mobile
phone. I do not have to be near a TV and radio any more.”
Access to credit: Traditionally, credit access at the BOP has been through local moneylen-
ders with interest rates ranging between 20% and 120% (Conning & Udry, 2007). ICT-enabled
facilitation of transactions has created easier access to credit and other financial services for BOP
consumers and producers. Similarly, improved institutional infrastructure has improved credit
terms and conditions (Conning & Udry, 2007). According to a 2008 report by Small Industries
Development Bank of India, access to credit by microfinance has supported entrepreneurial
activities and has helped in the growth of rural businesses. The report illustrates an instance
where a roadside tea stall owner started a “tiffin center” (breakfast place) in a leased building
with the help of a loan by a microfinance organization. In another example, a rural basket
seller set up a small embroidery business with the help of a similar loan. The microfinance organ-
izations mentioned in the report (e.g. SKS Microfinance) mention their ICT infrastructure and
ICT-based process efficiencies as key enablers of scalability and reach, which enable them to
provide credit to BOP members (e.g. http://sksindia.com). Mobile phones have been used to
enable access to money and credit. The M-PESA mobile money transfer system in Kenya
allows BOP microfinance customers to receive loans or repay them through a network of
airtime sellers, providing easier access to credit. The GCash platform enables BOP members
in the Philippines to electronically transfer money using their mobile phones (Alampay &
Bala, 2010).
Opportunity for employment and entrepreneurship: Improved matching of buyers and sellers
has enabled BOP producers to reach out to a larger market, thus fueling the creation of employ-
ment and entrepreneurial opportunities. For instance, there are about 6500 e-Choupal centers all
324 M. Tarafdar et al.

over India and each of them is run by a rural entrepreneur (http://www.echoupal.com), thus
creating at least 6500 jobs. Similarly, micro-credit support has enabled BOP producers to
start new enterprises or expand existing enterprises, creating employment opportunities
(SIDBI Microfinance Impact Study, 2008). Our interview data indicate that improved matching
of buyers and sellers through the use of mobile phones has created employment opportunities, as
a result of increased business transactions for BOP producers. One of our interviewees, a carpen-
ter, mentioned; “Now people know that they can contact me directly and call me whenever they
have work. Work has increased and I have recently hired another carpenter to work for me.” A
scenario like this implies greater success in the entrepreneurial effort, for the carpenter (and
other such BOP service providers), and opportunity for employment, for those who can be poten-
tially hired.
Poverty reduction: The relationship between ICT implementation and increased per
capita income (e.g. Avgerou, 2008) has been documented in the literature. We suggest
that improved market development is a mediating mechanism. Improved matching of
buyers and sellers and microfinance have the potential to create jobs as does improved facili-
tation of transactions, leading to poverty reduction. Studies of clients of one of the largest
microfinance organizations in India (SIDBI Microfinance Impact Study, 2008) suggest that
client households recorded an increase of 68.6% in average household income compared
to non-clients (31.2%) and that the proportion of client households having three meals a
day increased from 66.2 to 78.9%. We found many of our respondents reporting increased
earnings a result of their use of ICT in buying or selling activities. For instance, a housemaid
mentioned,
Since I have started using my mobile phone to scout for jobs and build a network, my earnings have
increased because now I more or less always have work. Idle [and hence non-economic] time in
between jobs has reduced a lot.
Reduction in poverty is seen as a means of achieving economic well-being and greater
latitude of choice in pursuit of goals such as education, as indicated by another house-
maid, “I am more certain of work now, so I do not worry so much about my son’s
school books.”
Social inclusion: Social exclusion is the phenomenon where particular segments of
society do not have access to or cannot afford specific information, amenities, and services,
as a consequence of which they cannot participate in society (Chigona, Beukes, Vally, &
Tanner, 2009; Powell, 2001). Improved matching of buyers and sellers and facilitation of
transactions have enabled BOP members to access these. Some of these, such as insurance
services (Kanungo, 2003) or Internet access were historically beyond the access of individ-
uals at the BOP and their availability generates options for accessing other things of value
such as relevant knowledge. One of our interviewees, a student, mentioned, “We now have
cyber centers in my village. I can find out information on colleges and jobs in the city and
can take advantage of such opportunities [that are not there in the village].” Through such
cyber centers, BOP participants have access to portals specifically relevant to them. The
Tarahaat portal, for example, delivers adult literacy and educational courses through the
Internet on money management and employable computer skills to rural populations in
India (Peterson, Sandell, & Lawlor, 2001). Similarly, Jagriti e-Sewa (http://www.jagriti.
com) is a rural networking platform operating in several Indian states and provides Internet
communication services along with IT-enabled services for health and education. Both of
these portals facilitate educational and economic opportunity and options for these popu-
lations, thus enabling their empowerment. Hence, social inclusion is a benefit of ICT-
facilitated market development.
 Information Technology for Development 325

4.3 How complementary conditions influence (facilitate or inhibit) ICT-enabled

market development
A common characteristic of ICT intervention initiatives in developing countries has been their
failure to achieve large-scale and sustained operation (Heeks, 2003). The important reasons why
many ICT intervention initiatives in developing countries have failed to achieve sustained oper-
ation have been their lack of use by (Ciborra, 2005) and lack of relevance for (Best & Kumar,
2008), intended users. Local and often complex conditions affect the success of ICT intervention
initiatives in developing countries. We therefore expect particular conditions to influence the
probability of successful ICT-enabled market development as well. We identified five such con-
ditions that can present barriers to sustained ICT-enabled market development.
First, in resonance with research on power issues of developmental initiatives (e.g. Kothari,
2001; Powell, 2001) and ICT-enabled grassroots development (e.g. Madon & Sahay, 2002), har-
nessing the support of and a constructive role for influential local elites is crucial for ICT-
enabled market development. We found two aspects to the role of such individuals. One, they
serve as local champions for the ICT applications and help generate buy-in among BOP
members by advocating and emphasizing their benefits. Their local influence and power
imparts credibility to their advocacy and helps overcome resistance among BOP consumers
and producers. Two, they can use their intermediary power to translate local needs (Kothari,
2001), in this case, into system and process specifications, to ensure that the market development
initiative actually meets the requirements of participants and is not just an artifact of the service
provider’s or development agency’s specifications or expediencies. For instance, the e-Choupal
initiative from ITC implied significant change in farmers’ grain selling and farming practices
and consequent resistance from those comfortable with the existing ones. “Sanchalaks” (or
host farmers) have been identified by ITC. These farmers are influential within the village
and take a leading role in running the operations of the telecenters by providing the physical
infrastructure such as rooms for hosting the computer equipment. They are in a sense, ITC’s
partners within the BOP community. They take on the role of champions to promote the initiat-
ive among farmers by educating them on the uses of the telecenters, teaching them how to use
the Internet, and serving as information conduits between the farmers and ITC, communicating
questions from the former and answers from the latter. In this way, they help address apprehen-
sions that farmers may have and facilitate market development enabled by the e-Choupal
initiative.
Second, we found a potentially obstructive role of service providers that hindered ICT-
enabled market development. ICT adoption by BOP consumers and producers was hindered
by their perception of hidden and less-than-beneficial motives on the part of the providers and
custodians of the particular ICT initiative. On being asked if he would be willing to pay a
monthly fee for daily updates of wholesale and retail vegetable prices on his mobile phone, a
vegetable vendor said,
I would hesitate because they may push some extra services which I don’t need and charge me for
those also, without letting me know. I have heard that there are many things they don’t tell before-
hand, but only after I start paying.
Such observations suggest that for sustained adoption, it is important for service providers to
communicate their intent to provide offerings that are useful and relevant to BOP members
and not make unannounced changes in their offerings and prices.
Third, high education levels of BOP consumers and producers increase their proclivity for
adopting ICT-enabled process changes in their transactions. A survey of telecenter users in
rural south India shows average users to be more educated than non-users (Kumar & Best,
2006). Also, telecenter users were found to have a higher level of education than the average
326 M. Tarafdar et al.

person in the community, with the heads of the user households comparatively more educated
compared to heads of non-user households in their respective village. Thus, education is an
enabler of ICT adoption and hence a facilitator of ICT-enabled market development. One of
our interviewees, a housemaid, mentioned, “I have heard that the Internet can do many
things, but I am not interested in using it. My brother, who has studied more grades than I
have, can use it.” Similarly, a number of rural roadside stall owners mentioned that their lack
of formal education was one reason why they did not want to use computers.
Fourth, the absence of institutional partnerships of the organization implementing the ICT
initiative, with public and/or private entities hinders intended market development. Such part-
nerships are essential for ensuring monetary support, ironing out logistical and implementation
difficulties, and addressing regulatory requirements. Many studies (e.g. London & Hart, 2004)
have shown that ICT intervention projects that are supported by public – private partnership
are more likely to be sustainable than those that are promoted by public or private players
alone. Kramer, Jenkins, and Katz (2007), suggest that strong partnerships have the potential
to expand economic opportunity from ICT projects. The case of Chirag telecenter kiosks,
which were intended to facilitate matching of buyers and sellers by providing relevant infor-
mation to BOP producers and consumers, brings to light the importance of institutional partner-
ships. Failure of sustained and long-term use of the “Chirag” telecenter kiosks in India is largely
attributed to collapse of institutional partnerships. N-Logue was a private-sector institutional
partner providing connectivity and technology. Kiosks that closed down reported lack of
support from N-Logue as a primary reason (Best & Kumar, 2008).
Finally, adequate technical support and user-friendly application interfaces for BOP consu-
mers and producers are necessary for continued use of applications that enable market develop-
ment. Inadequate technical support greatly diminishes the purpose of ICT-enabled projects.
Since many of these projects are based in areas that are located far from towns and cities, acces-
sibility becomes a big problem. Any small technical glitch will mean disruption in service and
loss of time and money. This problem has been very common with telecenters located in rural
areas. In one particular instance, four telecenter kiosks had no connectivity for more than
6 months because of breakdown at a relay base station which delivered wireless connectivity
to the kiosks (Best & Kumar, 2008). Lack of technical support to BOP projects makes them prac-
tically useless, and fosters disinterest and non-use on part of users, aggravating agency issues.

5. Contribution, limitations, and future research

The primary contribution of this paper is in offering a theoretical and empirical understanding of
how ICT can enable market development at the BOP. Integrating concepts from the automate –
informate – transform classification of ICT roles, ICT-enabled development, market mechan-
isms, and agency freedom, we analyze how ICT can facilitate development of the three
market mechanisms of facilitation of transactions, matching of buyers and sellers, and providing
institutional infrastructure. We further argue that these mechanisms can lead to beneficial social
and economic outcomes for BOP markets and BOP members. Given emerging ideas on the
importance of market development for BOP producers and consumers (Karnani, 2007; Prahalad,
2005) and scant research on the enabling role of ICT therein, this paper speaks to an interesting
and relevant research gap.
A second contribution is in highlighting agency aspects of ICT-enabled market development
at the BOP. Emerging ideas (e.g. Zheng, 2009) point to the potential of ICT-enabled develop-
ment in enhancing the agency freedom of individuals. This paper develops this notion by iden-
tifying benefit outcomes of ICT-enabled market development for BOP members that enhance
their agency freedom. The five outcomes for individuals, taken together and individually, lead
 Information Technology for Development 327

to empowerment of BOP participants and enable them to achieve their aspirational goals with
respect to consumption and entrepreneurship. The paper thus shows that market development
enables BOP consumers and producers to achieve agency freedom to a larger extent than
might otherwise be possible.
Academic discourse on ICT in developing countries has addressed various aspects of ICT-
enabled social and economic development. There is particular potential within this discourse for
understanding how ICT can lead to development (Avgerou, 2008). While it is generally accepted
that ICT is relevant to positive social and economic outcomes in developing countries
(Walsham, Robey, & Sahay, 2007), the pathways from ICT implementation or awareness of
computers, to social development are not automatic and not always apparent (Kuriyan et al.,
2008). Thus, there have been calls for research that examines particular courses of action
that achieve social and economic changes through ICT (Avgerou, 2008; Kuriyan et al., 2008).
A third contribution of the paper then is in speaking to this discourse by providing theoretical
development and empirical evidence of how the use of ICT in BOP communities can develop
markets and result in benefit outcomes, thus suggesting that ICT-enabled market development
is a mediating mechanism between ICT roles/capabilities and social and economic benefits at
the BOP.
Fourth, we note that while there are examples of ICT-based initiatives that have succeeded in
bringing products to BOP consumers (Anderson, 2006) and customers to BOP producers
(Vachani & Smith, 2008), scholarly research does not provide a theoretical explanation of
how this might happen. This paper’s examination of ICT-enabled market mechanisms provides
a possible answer.
For practice, the paper identifies specific mechanisms that might form the focus of ICT inter-
ventions by corporations and other entities, in their attempts to sell to or buy from BOP consu-
mers and producers. It suggests that using ICT to enhance the three market mechanisms is likely
to make their marketing efforts at the BOP more efficient and profitable. The automate – infor-
mate – transform classification provides broad guidance in identifying specific types of appli-
cations that may be applied to develop particular market mechanisms.
For policy, the proposed framework can be used by government and non-government
agencies that aim to accomplish ICT-enabled development at the BOP. Particularly, many
e-government projects aimed at rural populations have run aground because of lack of adequate
response from the intended participants. In suggesting that local elites be recruited as partners in
ICT-enabled market development initiatives, the paper points to ways for harnessing a construc-
tive role for intermediaries that can influence the success of such initiatives. The ideas presented
in this paper also point to ways of using ICT to create and develop markets for government
services at the BOP.
We note here that the paper is a starting point for understanding how ICT interventions can
help create markets and associated social and economic benefits at the BOP. One limitation is
that although it identifies complementary conditions that facilitate or inhibit ICT-enabled
market development, it does not address the issues of actual implementation or cultural accep-
tance. How, for instance, would the involvement of potential BOP consumers and producers
influence implementation of systems and applications? What would be the cultural barriers in
the way of their acceptance by communities that are by and large used to socially entrenched
word-of-mouth means of information processing and communication? As such, future scholarly
work in this area will need to consider more detailed field studies for further elaboration and
extension of our propositions and broader validation of the ideas outlined in this paper.
To conclude, research that examines experiences and lessons of ICT-enabled development
reveals that technology does not always serve intended purposes (Avgerou & Walsham,
2000). Therefore, there have been calls (e.g. Walsham & Sahay, 2006) for understanding the
328 M. Tarafdar et al.

“meaning of development” and ICT’s role therein. This paper considers ICT-facilitated social
and economic developmental actions by analyzing the role of ICT in market development at
the BOP.

Notes on contributors
Monideepa Tarafdar is Associate Professor of Information, Operations and Technology Management.
She has undergraduate and graduate degrees in Physics and Telecommunications Engineering from the
University of Calcutta, India, and a doctoral degree in Management from the Indian Institute of Manage-
ment, Calcutta, India. Her research interests include IS management in developing country contexts, nega-
tive cognitions from IS use and IS and innovation. Her research has appeared in, among others, Information
Systems Research, Sloan Management Review, Journal of MIS, Communications of the ACM, Journal of
Strategic Information Systems, Information and Management, International Journal of Information Man-
agement, International Journal of Operations and Production Management, Journal of Global Information
Technology Management and Journal of Computer Information Systems.
Prashanth Anekal is a doctoral candidate in Manufacturing and Technology Management at the University
of Toledo. He has a Bachelors degree in Mechanical Engineering from Visvesvaraya Technological
University, India and an MBA from the University of Toledo. His research interests include market devel-
opment at the bottom of pyramid, supply chain strategy and use of IT in supply chains. He has presented his
work at the National Decision Sciences Institute Conference and the Americas Conference on Information
Systems.
Ramendra Singh is Assistant Professor of Marketing. He has a Bachelor of Technology degree in from
Indian Institute of Technology – BHU, an MBA from Xavier Labour Relations Institute and a doctoral
degree from Indian Institute of Management Ahmedabad. His research interests include salesperson
performance and marketing to the bottom of the pyramid. His research has appeared in, among others,
Industrial Marketing Management, Journal of Indian Business Research, Journal of Business and
Industrial Marketing, Marketing Intelligence and Planning and Asian Case Research Journal.

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