At the BoP, Companies First Need to Create the Market
Monday, October 26, 2009
Around the world, four billion people live in poverty. And Western companies are struggling to turn them into customers.
For the past decade, business visionaries have argued that these people, dubbed the Base of the Pyramid, make up an enormous, untapped market. Some of the world’s biggest, savviest corporations have aimed to address their basic needs—by selling them everything from clean water to electricity.
But, time and again, the initiatives have quietly fizzled out. Why? Because these companies were looking at it all wrong.
Put most simply: The Base of the Pyramid is not actually a market. True, those billions of low-income people have a lot in common. But they don’t have two of the vital characteristics you need to have a consumer market. They haven’t been conditioned to think that the products being offered are something one would even buy. And they haven’t adapted their behaviors and budgets to fit the products into their lives. A consumer market is nothing less than a lifestyle built around a product.