Business Setting Sights on Low-Income Market
Wednesday, March 21, 2007
BUSINESS interest in low-income Filipinos comprising the so-called base of the economic pyramid (BOP) is on the rise, according to a new report by the International Finance Corp. (IFC) and the World Resources Institute.
Comprising 30 percent of the Philippine population, the BOP market spends its money largely on mobile phones, pharmaceutical products, and information and communication technology, the report titled ?The Next Four Billion: Market Size and Business Strategy at the Base of the Pyramid,? said.
The report estimates the domestic BOP market to comprise 23.6 million Filipinos who live in relative poverty but have a combined purchasing power of $13.09 billion.
Among those that have begun targeting this market include multinationals, big home-grown companies and small entrepreneurial ventures and social entrepreneurs.
?A stronger indicator is the number of large companies conducting pilots, launching new businesses, or extending product lines in existing businesses that serve BOP markets. Of these, multinational consumer product companies such as Unilever and Procter & Gamble have the most extensive record, with ?sachet? marketing now widely known and single-serving product sizes now dominant in many consumer markets,? the report said.
?The report backs up the calls for broader business engagement with the base of the pyramid, stressing the need for the private sector to play a greater role in development,? said Michael Klein, IFC chief economist.
The IFC report is the first that measures the BOP market using income and expenditure data from household surveys.
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