Frugal Innovation for

Emerging Markets
Frugal, Self Reliant innovation
• https://youtu.be/cHRZ6OrSvvI
• Innovation that is popular in India and other countries in the global south, where citizens
face global challenges such as poverty and climate change with limited resources. 
• The solutions put forth must be low-cost, robust and easy to use, and have the potential
to be targeted at large populations. 
• Referred to as Zizhu Chuangxin in China, Gambiarra in Brazil, DIY in US, Jua Kali in Kenya
• Cultural value that is the most powerful for such markets: community and the high value
of others. (e.g. Guanxi in China)
• Do innovations have to be costly?
• Thinking beyond ‘Six Sigma’
• What are the target markets and segments for frugal innovations?
Disruptive Innovation
• Frugal innovation
• Driver: what do they need
• Process: bottom-up
• Core capabilities: functionality
(rugged, lightweight, adaptable,
simple)
• Location: developing markets,
emerging markets, mature
markets
• Conventional innovation
• Driver: what would be nice to
have (want)
• Process: top-down
• Core capabilities: desirability and
design (differentiation)
• Location: developed markets.
Criteria for frugal innovation
• Defining the problem independent of solutions (don’t be myopic)
• Substantial cost reduction
• Concentration on core functionalities
• Performance level optimization
 Aspect 1: low cost product innovations
Low Cost innovations High Cost Innovation

• PeePoo bags
• https://www.youtube.com/watch?v=4_PAZZwT9oI
• Jaipur Foot
• https://www.youtube.com/watch?v=9pgVPSBHc2o
• Mitticool
• Godrej ChotuKool
• Aravind Eyecare
• Aakash Tablet PC
• GE Handheld ECG device
• Vortex ATMs
• INR 1 mosquito paper by Godrej
Aspect 2: Low cost Green Innovations
Sustainable green low cost home,
Bakeys edible cutlery Mangaluru
• https://www.youtube.com/watc
h?v=r4Cc5zmy0eY
Aspect 3: Low cost Business Model designs
• Platform economy
• Best innovation in store design/ business processes: WOW Momo
• Innovation compatible with Open Source OS: Samsung mobile phones
• Education: Models like Coursera
• Mobile Phones: Rs. 179 for a month unlimited tariff plan
Defying the Myths
• Low cost is low margin
• Low cost is low quality
• Low cost is cheap imitation and not true innovation
• Low cost is unbranded
Does frugal innovation
correspond to blue ocean?
Which level is the biggest impediment in sustainable
value creation through frugal innovations?
How can cost and quality be
simultaneously optimized?
Some solutions…
• Use of proven parts
• Leverage on the local supply chain
• Reverse innovation
• 80-20 rule
• Economies of scale and scope
Down-market stretch: Should conventional
brands go low cost
• Should low cost model be operated within the core business?
• Should it share the same brand as parent?
• What should be the focus; Maximize synergy with parent brand vs.
autonomy?
• Growth: Organic or through acquisition?