Colombia has an estimated 400,000 micro and small stores or "tiendas”[1]. In Colombia, these retailers comprise 52% of food and retail sales.[2] While tienda entrepreneurs sell hundreds of different products, and have managed to keep contact with wholesalers, most continue to use unsophisticated business administration tools (writing down sales and purchases on notebooks) or none at all. Colombia also has one of the most penetrated information communication and technology (ICTs) markets: there are 92.3 cell phone subscriptions per 100 people, and 45.5% of the population uses the internet[3].
Frogtek, a firm specialized in creating business tools for entrepreneurs in emerging markets, identified that a major challenge for micro-retailers was managing their perishable inventories and figuring out how often they would need to restock them. While several non-governmental programs have tried to address these issues through financial education and literacy training programs, shopkeepers continue to use unsophisticated methods, or none, and cannot easily determine the size of their inventory or actual profits.
To address these challenges, Frogtek created “Tiendatek”, a smart phone application to help shopkeepers systematize their business by managing their accounting, inventories, sales, payments to suppliers, expenses and earnings. The tool is distributed through personal sales associates who visit the shopkeepers, demonstrate the product, and provide training on its use during the length of the pilot. All data generated by the shopkeeper is uploaded and stored on a Frogtek web server. Additionally the Tiendatek application creates simple and advance reports on sales, purchases, credit, inventory, and break-even points based on the data uploaded by the user.
This study pilot targeted clients of a microfinance institution, Bancamía, who are shopkeepers with sales of about 4.5 million COP (about 2500 USD) a month. Frogtek staff interviewed the candidates, assessed their interest, delivered the phone and provided training in one or two visits. Fifty participants were selected to receive a baseline survey approximately ten to twenty days after receiving the new phone and an endline survey, eight to ten months after the initial phone delivery. Shopkeepers participating in the pilot received a phone, charger, SIM card with data access, and a TiendaTek manual free of charge. Those shopkeepers who become frequent users of the application by the end of the study, will be able to keep the phone and receive a three month data plan. By collecting data on the use of the application, store production, sales, satisfaction, and perceived improvements, this comparative study will assess the use of Tiendatek, possibly for further analysis in a randomized evaluation.
Results forthcoming.
[1]Diaz, Alejandro, Jorge Lacayo, and Luis Salcedo. 2007. ”Selling to ‘mom-and-pop’ stores in emerging markets” The McKinsey Quarterly,
[2]De Jacobs, Alicia. “Colombia Retail Food Sector” USDA Foreign Agricultural Services Global Agricultural Information Network Report, October 2010.
[3]United Nations Conference on Trade and Development 2010 Information Economy Report