Business Commons^™

Selling Off-Grid Light To Liquidity Constrained Consumers, Bhavani Shanker Uppari, Ioana Popescu, Serguei Netessine

Research Collection Lee Kong Chian School Of Business

Problem definition: A large proportion of the world’s population has no access to electricity and so relies on noxious kerosene for their lighting needs. Solar-based solutions require a large up-front investment and are often unaffordable in this market owing to consumers’ tight liquidity constraints. As an alternative, there are business models relying on rechargeable light bulbs that are sold at a subsidized price (which renders them affordable) and require regular micropayments for recharges (which eases liquidity constraints). These bulbs provide a cheaper and healthier light source than kerosene, yet their adoption is lower than expected, and some consumers continue …