NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Why settle for single-digit margins, asks C.K. Prahalad, when there’s greater game afoot?

Look at which industries are growing rapidly. Take cell phones. There are 300 million cell phones in China, and not all are in the hands of rich people. There are 40 million cell phones in India, and they’re adding 1.5 million new subscribers per month. Again, not all rich people. It is poor people, ordinary people, on whose backs these businesses are being built. If you take three countries-China, India, and Brazil-you have 500 million cell phones, compared to 170 million in the Unite...

Source

Accross the Board

Operators draw low-income users with electronic payments

Southeast Asian mobile-phone operators, including Indonesian Satellite and Globe Telecom, which is based in Manila, have followed Smart’s lead in the past year, introducing electronic prepaid services to win users who cannot otherwise afford mobile services. The strategy is fueling sales and profit growth for operators in the Philippines and Indonesia, where per capita income averages less than $1,100 a year, according to the World Bank. ...

Source

International Herald Tribune

Mexico’s Cemex Feeds Kilns A Cheap Refinery Leftover Called Petroleum Coke

Cemex’s success in reducing its energy expense offers an unusual lesson in global business, showing what a developing-world company can do when forced to deal with competition from the developed world. In some cases the difficult operating environments of emerging markets -- economic turbulence, high borrowing costs, creaky infrastructure and corruption -- can act as a rigorous corporate boot camp, breeding the kind of innovation that makes for lean competitors on the world stage."...

Source

The Wall Street Journal

Region

Latin America

Rural homes without electricity get chance to receive solar power

For as low as P343 per month, rural households in areas not reached by electricity will have the chance to use modern conveniences such as television sets, electric lights, karaokes and radio sets through solar power energy. Last week, the Negros Oriental provincial government, the Shell Solar Philippines Corp. and the Southern Sun Solar Power Corp. signed a memorandum of agreement that seeks to give solar-powered systems in rural areas through heavily-discounted loan packages. ...

Source

Philippine Daily Inquirer

Poverty Is a Growing Risk to Asian Markets

Poverty isn’t something investors--nor many economists, for that matter--give much thought to. It doesn’t figure readily into bond yields or stock valuations. It’s not the first thing currency traders think about when placing bets. Nor is it an issue the world’s most powerful central banks ponder seriously. Yet that’s likely to change in the years ahead. All this matters to investors because China, India and other emerging Asian economies comprise the new frontier of c...

Source

Bloomberg

In Asia, more equality means less poverty

The fate of the poor is also linked to other sectors and regions through migration, trade and remittances. For growth in these areas to contribute to poverty reduction in a larger way, it is essential to establish incentives for companies to utilize labor-intensive production. This requires enabling investment and appropriate trade, industrial and labor policies that make it profitable for businesses to hire workers. ...

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International Herald Tribune

How to turn the poor into consumers

Growth opportunities in the region of 50 to 100 per cent are available if companies find that elusive ’sweet spot’ of function, price, distribution and volume. Take the Monsoon Hungama mobile phone. GSM mobile phones were first available in India for $1,000. As the price fell to $300, use gradually spread. When Reliance, a mobile phone provider, introduced the Monsoon Hungama promotion of 100 free minutes with a multimedia handset for $10 and a monthly payment of $9.25, the compan...

Source

The Financial Times

Microfinance key to poverty fight

With little income or collateral, poor people are seldom able to obtain loans from banks and other formal financial institutions. Microfinance is one way of fighting poverty in rural areas. Through microfinance institutions such as credit unions, financial non-governmental organisations and even commercial banks, poor people can obtain small loans, receive money from relatives working abroad and safeguard their savings. Microfinance has changed the perception that poor people are not cred...

Source

The Financial Times