Powering entrepreneurs in rural towns

Unlock the Editor’s Digest for free

Sreevas Sahasranamam is a professor at Adam Smith Business School, University of Glasgow

In the city of Udupi in south-west India, a start-up is rethinking ecommerce. Co-founded by Anup Pai and Ravi Haldipur, eSamudaay is acting as a catalyst for digitally powered entrepreneurship by enabling small retailers, micro-entrepreneurs and street vendors in small towns across the country to use open-source technology.

“We are not building an Amazon or Flipkart, rather we are creating a community-owned digital ecosystem that keeps the economic value within local communities, alongside ensuring data sovereignty and local governance,” says Pai.

eSamudaay has built “business in a box” software that allows non-technical entrepreneurs to set up and run local ecommerce platforms. It acts as a DIY digital toolkit that helps with cataloguing, marketing, order management and logistics. In Udupi, the company has supported small entrepreneurs ranging from roadside vegetable vendors and restaurant food delivery services to general stores and pharmacies.

Test yourself

This is part of a series of regular business school-style teaching case studies devoted to business dilemmas. Read the text and the articles from the FT and elsewhere suggested at the end (and linked to within the piece) before considering the questions raised. The series forms part of a wide-ranging collection of FT ‘instant teaching case studies’ that explore business challenges.

Its approach comes in stark contrast to that of the world’s ecommerce groups. While Amazon has centralised its entire ecosystem, eSamudaay promotes local ownership and control. Instead of holding data centrally in its global servers, it uses local data storage, protection and ownership. It deploys an open-source interoperable protocol called Beckn. Amazon uses a proprietary closed system.

While Amazon’s business model relies on charging commissions on products and selling advertisements in order to be featured on its first page, eSamudaay offers local entrepreneurs the freedom to partner with local cultural festivals for marketing and promotions. eSamudaay’s business model is based on a subscription or leasing arrangement for the use of software.

Digital commons-based approaches, where digital resources are shared, face their own challenges. They require co-ordination among multiple stakeholders, such as the local community and entrepreneurs, which can be complex and time-consuming. There may be free-rider problems where some users might benefit from shared resources such as software and data without contributing to their creation, maintenance or improvement. They often rely on voluntary contributions, which can slow down their maintenance and even pose security risks.

Centralised platforms streamline operations and benefit from economies of scale to reduce costs, permit more robust data analysis and enable data-driven decision-making. While customisation helps with local integration into markets, the lack of standardised practices in digital commons-based approaches can result in inconsistencies in service quality and in the customer experience.

By early 2025, the model eSamudaay developed for Udupi had been replicated in eight other smaller towns in India, including Meerut in Uttar Pradesh and Thanjavur in Tamil Nadu. According to Haldipur, eSamudaay had more than 2,500 micro-entrepreneurs on its platform in the financial year ending March 2025, fulfilling orders with a gross merchandise value of nearly Rs7mn (about $81,000).

Though the number is tiny in comparison to the operations of large ecommerce businesses, the company’s open-source, community-centric model is beginning to offer an alternative that could coexist with centralised ecommerce players and give a digital voice and greater visibility to micro-entrepreneurs.

Public sector support will help. For example, eSamudaay is closely aligned with the Open Network for Digital Commerce (ONDC), an Indian government-supported initiative to democratise entrepreneurship. It is also part of a digital public infrastructure project called the India Stack, which provides government-backed APIs, or application programming interfaces that include Aadhaar, a biometric identity scheme, and the Unified Payments Interface, India’s digital money system.

These initiatives increase market access and lower credit barriers for micro-entrepreneurs. For instance, in Gorakhpur in Uttar Pradesh, a vendor who once sold tea and snacks from an open cart on the roadside has been able to approach a lender and, by showing a digital audit trail of transactions from his UPI app for the month, has secured a loan to open a roofed kiosk without the need for any collateral.

Digital commons-based efforts are gaining traction in ecommerce and other sectors in other low and middle-income countries. For example, Good Market, which started in Sri Lanka, connects social enterprises with consumers through a digital commons marketplace model. By July 2025, more than 4,400 social enterprises in more than 118 countries used its digital commons platform.

Pix in Brazil and UPI in India are digital commons-based real-time payments systems. In March, there were more than 6bn transactions on Pix, while in May UPI handled more than 18bn transactions. These systems lowered costs for small businesses by permitting instant payments without the need for intermediaries.

Digital commons-based initiatives such as eSamudaay offer an alternative model to the big ecommerce platforms in rural and small towns, particularly in lower-income countries. By reducing barriers to market entry, offering capabilities through digital skilling, and fostering local ownership, they are driving inclusive economic growth and building self-reliant communities.

But by early 2025, Haldipur was striking a more cautious note. “Our data costs are piling up and we are looking for more local investors to scale our efforts,” he says. He was also closely following the news that, two years into operation, with fewer discounts and offers, the government backed ONDC was beginning to see a decline in order numbers.

For eSamudaay and others that want to use digital commons-based approaches to empower local entrepreneurs, the challenge will be to find strategies that make it possible to retain current customers while expanding into more communities across India.

Questions for discussion

Tags: