Economic Crisis Forces Businesses to Focus on the Poor
Monday, September 14, 2009
In India, the economic crisis may actually be good news.
During the salad days of the past decade, India’s entrepreneurs grew fat selling gas guzzlers and palatial homes to the country’s new rich, while ignoring the needs of the biggest segment of Indian consumers: the poor. It was an expatriate Indian, the University of Michigan’s C.K. Prahalad, who first posited that there were millions to be made selling to the “bottom of the pyramid.”
Now that’s starting to happen.
The rich aren’t buying, and Indian businessmen are finally starting to look at the teeming masses as something more than cheap labor. The result could be the solution of some of India’s most persistent problems — an abysmal housing shortage, chronic underemployment and an unsustainable rate of rural-urban migration, for instance.
“The slowdown was a great thing to happen to India,” affirmed management consultant Harish Bijoor, who said the downturn has encouraged companies to look beyond the “low-hanging fruit” in the urban market to the vast multitude of consumers in India’s rural heartland — which still accounts for more than two-thirds of the country’s population and some 60 percent of its gross domestic product.
