Framework conditions to design sustainable business models for decentralised water treatment technologies in Viet Nam for international technology providers

The expansion of water-intensive industrial activities and the impacts of climate change are jeopardising the sufficiency of safe drinking water in several Southeast Asian countries. One is Viet Nam, where geogenic arsenic contamination further limits the availability of freshwater resources with a simultaneous increase in water demand. Innovative and sustainable water treatment technologies are required to meet these challenges. Equally, we assume that the provision of safe drinking water requires tailored business models (BMs). In this study, we focus on the key stakeholders and framework conditions to design tailored BMs providing safe drinking water to the low-income and middle-income population in Viet Nam. We consider decentralised technologies to be suitable due to their lower investment costs for implementation and the avoidance of strong path dependencies. We therefore conducted a literature review and interviews with international experts in the domain of decentralised water treatment technologies. Our results show that relevant aspects include a lack of financial resources, specific characteristics associated with Vietnamese culture, e.g. the importance of relationships and trust in the business domain, lack of education and vocational training, market saturation suggesting co-operation with existing water suppliers, lack of suitable partners, and deficiencies in the institutional environment.


INTRODUCTION
In recent decades, there has been progress made in the access to improved water sources and to basic water services in East and Southeast Asia (WHO & UNICEF , ). Improved (drinking) water sources are 'those which by nature of their design and construction have the potential to deliver safe water' (WHO & UNICEF , p. 8). Basic water services refer to drinking water from an improved source, provided that the collection time is not more than 30 min for a round trip (WHO & UNICEF ). According to WHO & UNICEF (), 95% of the population in Eastern Asia and South-Eastern Asia enjoyed access to improved water sources in 2015. In Viet Nam (following the UN, we use the spellings 'Viet Nam' and 'Vietnamese' in this paper), 94% of the population had access to improved water sources and 91% could access them within 30 min, including queueing. However, regional differences exist as well as differences depending on income levels. In 2015, the regional population enjoying access to basic water services ranged from 84 to 99% (WHO & UNICEF ). ules for decentralised water treatment, which can be combined with renewable energy production modules including storage to form customised system solutions. An important goal was to improve the energy supply of the hybrid process by integrating regenerative energy sources (photovoltaic and wind), in order to enable a self-sufficient and decentralised operation of the plants (without grid connection). In general, decentralised technologies have several advantages: they can be tailored to local conditions and avoid the path dependencies typical for centralised infrastructure, allowing adaptation to changing conditions in the surrounding settlements or the environment (Sartorius ). They allow the reduction of environmental and social impacts, enhanced public participation and cost recovery (Domènech ).
As technology is not a 'panacea for sustainability' (Silvestre & Silva Neto ), we consider business models (BMs) an important part of these solutions. BMs are 'a simplified and aggregated representation of the relevant activities of a company' (Wirtz et al. ,p. 41). In this article, the notion of a sustainable business model (SBM) is used. A SBM is defined here as an organisation's proposition, creation, delivery, capture, and exchange of value in a sustainable way, realised 'for, and in collaboration with, a broad range of stakeholders' (Geissdoerfer et al. society and/or ecology by striving for sustainable social, ecological, and economical values and considering (negative) externalities. However, the water sector lacks sufficient knowledge of innovative BMs, and profit-oriented organisations are often suspected of exploiting the poor by selling them the 'human right' to water (Gebauer & Saul ).
This article aims to identify the framework conditions for SBMs that ensure access to safe drinking water for the low-income and middle-income population in Viet Nam using decentralised water treatment technologies. We determine the key stakeholders for such BMs as well as the framework conditions in the low-and middle-income segments of the Vietnamese water supply market. In this paper, we focus on the perspective of European actors and draw upon three concepts for our research design: the base of the pyramid (BoP) concept and the emerging market theory are used to determine the framework conditions specific to the Vietnamese water supply market and the low-income population there. The literature on SBMs (innovation) is used to identify existing innovations in the sector as well as potential BM responses to the determined framework conditions. Low-income populations in emerging countries are increasingly recognised as a large and attractive market (Ablaza et al. ). Emerging countries or markets are only loosely defined in the literature. Here, emerging markets are understood as low-to middle-income countries with prospects for rapid economic growth and integration into global markets. They are not yet 'developed countries', but are striving for this category and might share certain features. Emerging markets and low-income markets are characterised by specific features and challenges that must be considered when operating in them. One major concern in developing countries that pertains to water technologies is affordability (Gebauer & Saul ). While philanthropic approaches that rely on donations can be important for development, they lack self-sustainability in economic terms (London ). For this reason, Prahalad & Hammond () propose a market-based approach to serve the poor, changing the perception of the poor from receivers of philanthropic aid to customers. This concept creates a value for both the supplying company and the customers served (Prahalad & Hammond ) and is known as the BoP approach (Prahalad ). Prahalad () describe the BoP as a population with an annual per capita income below US$1,500 (in purchasing power parity (PPP)). While countries such as India, the Philippines and Indonesia have since developed to become lower middle-income countries, the term BoP is still used to describe the poor in these countries (Sánchez et    European experts for the interviews. In total, we contacted 31 potential interview candidates from 23 different organisations. Fourteen did not respond, six of the originally contacted persons provided contacts to experts they thought to be more suitable, and four declared no interest in or capacity for participation. Three of the contacted experts responded too late to conduct an interview with them. Therefore, four interviews were conducted in total. The first interview was with the CEO of a foreign NGO operating in the Vietnamese water supply sector, who is referred to as Expert A. The second interview was with Expert B, who has been working in Viet Nam for 4 years as a deputy CEO and a market consultant. The third interview was with the CEO of a German company offering consultancy and planning in the sector, as he has experience of the Vietnamese market (Expert C). Expert D is a German engineer, who has lived and worked in Viet Nam for more than 10 years on water-related issues.
We applied a semi-structured design to allow interviewees the freedom to answer without pre-categorising or limiting their responses. An interview guideline provided some degree of data comparability and structure and served as orientation during the interview (Mayer ).
The interview questions specifically addressed decentralised water treatment technologies in Viet Nam and the experts were briefed accordingly. The guideline was not used as a the BoP context, SBM design, or Viet Nam. They belonged to the topics 'target group', 'institutional framework', 'stakeholders', 'business models for sustainability', and 'success factors and obstacles'. The transcripts were coded using MAXQDA, and new categories were created when necessary based on the transcripts to ensure the openness of the analysis (Kaiser ). As proposed by Kaiser (), the transcripts were mainly coded based on paragraphs. In a second step, the statements of each expert were summarised within each category and redundancies eliminated. According to Kaiser (), categories that are not used need to be revised.
After condensing the material of each interview, the contents of all interviews were merged within the same category and the key messages of the different categories were identified. Finally, the results of the interview analysis were used to verify the results of the literature research with regard to the specific target marketi.e. decentralised water treatment technologies in Viet Nam. The findings are therefore presented in a combined manner.

RESULTS AND DISCUSSION
The utilisation of available water sources in Viet Nam varies across regions (GSO ). These include bottled water, tap water, rainwater, water from dug and tube wells, spring water, surface water (without rainwater), and other sources (GSO ). While tap water is favoured in urban areas, tube wells, dug wells, and rainwater are more popular in rural areas (GSO ). Rainwater is used extensively during the wet season, but in their study of the Tra Vinh province in the Mekong River delta (MRD), Li et al. () showed that other water sources experience an upswing during the dry season. The literature shows that most Vietnamese treat their drinking water, for example, by boiling or straining it (Li et al. ). The differences regarding the utilisation of existing water sources, their treatment, as well as context-specific features need to be kept in mind when designing a BM to introduce innovative water treatment technology in Viet Nam.

Special features and potential (BM) responses
While the attractiveness of the low-income populations in emerging markets is now recognised (Ablaza et al. ), these markets differ from those of developed countries (Prahalad & Hammond ). The literature describes various features specific to emerging markets and the BoP markets, which are shown in Figure 1. We assume that successful operations in these markets must acknowledge and respond to these special features and challenges.  Table 1.

Lack of financial resources
During the interviews, experts pointed out the lack of two resources regarding decentralised water treatment technologies: financial resources, which are addressed in this section; and skilled labour, which is addressed in the following section on culture and the lack of education. As heterogeneity was only confirmed as a relevant feature in the field of financial resources (Expert A), it is included in this section.
Constraints on financial resources exist in all markets to some extent, but this problem is much more severe in BoP markets (Ablaza et al. ). Financial means may be limited and also very volatile (Gebauer et al. ). A lack of financial resources was confirmed concerning potential customers such as local water producers (Expert A) and communities, districts and provinces (Experts B and C), as well as final consumers. While the interviews showed that shortages of financial resources remain a problem even for decentralised technologies, these technologies still have advantages compared to centralised infrastructure (Sartorius ). Financial shortages can be managed by specific BM elements. In urban areas, financial resources are heterogeneous, whereas heterogeneity is less common in rural areas (Expert A). More affluent people can afford to buy well-known and trusted brands, while the less affluent population has to trust local retailers from whom they buy most products (Expert A). While price is important for the latter group, the most important selling proposition for the former group is convenience (Expert A). In this unbranded competition, existing distribution channels can be utilised to gain the trust of final consumers (Expert A). For example, the organisation of Expert A collaborates with existing local water producers, whereby the distribution channels are maintained and the person(s) from whom the water is bought stay(s) the same.
In response to financial constraints, BM design suggests that customers contribute to value creation (Gebauer et al. ). In the case of water treatment technologies, the value created for the customer is access to safe drinking water. The customer might contribute to installing, operating, and maintaining the technology and to downstream distribution activities, i.e. delivering or collecting the treated water. Other eligible options include the combination of a 'market-based approach' with fund-raising, and local sourcing or assembly, i.e. procuring and assembling components locally (Gebauer & Saul ).

Deficiencies of the institutional environment
Emerging markets tend to lack institutions such as specialised intermediaries, a well-functioning regulatory system and mechanisms to enforce contracts (Khanna & Palepu ). These deficiencies can make transactions very expensive or severely impede them (Khanna & Palepu ). There are four levels of administrative structure in Viet Nam: central, provincial, district, and communal (Tu n.d.).
On all of these levels, governmental authorities deal with different topics concerning water (Wegner ), and coordination and consultation between them is problematic (Expert D). There is a general lack of financing (Experts B and C). Overall, local levels were described as decisive for the implementation of decentralised water treatment systems (Experts A, B, C, and D). The old saying: 'the power of the emperor stops at the village gate' was mentioned and transferred to modern times: today, the village gate seems to be the gate to the province (Expert B). However, people at the local level might lack the necessary expertise to truly understand the proposed concepts, meaning convincing them will be more difficult (Expert C). Interaction with the national level might thus be more fruitful (Expert C). In addition, Expert C pointed out that Viet Nam is organised as a centralised state, so the national level is very important, and that it has a flat hierarchy, enabling interaction with higher levels. A top-down approach combined with the involvement of local levels was therefore described as promising (Expert C).
Another challenge pertains to the sector's regulatory framework. While the regulatory framework including the rules for drinking water production is described as straight- Informal institutions are an additional impediment to operations in emerging markets (Oyedele ). The term informal institutions refers, for example, to conventions, norms, and customs, which shape human interactions (North ) and may include illegal practices such as corruption (Oyedele ). According to Oyedele (), informal institutions add to the complexity of emerging markets and need to be taken into account when designing BMs.
Some of the practices observed in the Vietnamese water supply market are pointed out in the following.
In the context of socio-cultural practices, traditions and rules, the lack of intercultural studies (Expert B), and data on the Vietnamese water supply market were criticised (Expert A). According to Experts A and D, bottled water is used by the lower income population. The quality of local brands of bottled water was described as very variable, depending on the brand and the season (Expert A). The usage of household water filters by the middle-and highincome urban population was also described (Expert D).
Depending on a household's financial resources, they are used to treat all the water consumed by a household or only its drinking and cooking water (Expert D). Furthermore, water boiling was identified as a deeply ingrained habit that is still practised, even for filtered water (Expert  • R&D activities and data (a, b, f) • Training (a) • Local endorsement (b) IOs and funders • Technical support (a, c, d, g) • Financial support (a, c, d, g) Local intermediaries • Identify potential partners and suppliers (c, d) • Access to customers and potential partners (c, d) • Build relationships and networks (c, d) • Language and cultural expertise (c, d) • Expertise on customer taste (c, d) Own

CONCLUSIONS
In this article, we determined the features that are specific to the BoP markets and emerging markets in the case of decentralised water treatment technologies in Viet Nam from the perspective of European actors. We assume that a successful design of SBMs to ensure access to safe drinking water for the low-income and middle-income population in Viet Nam must consider and respond to these framework con-