World Bank Study reveals $5 trillion market

Thursday, March 22, 2007

The poor have substantial purchasing power too ? purely because there are so many of them. The 4 billion people across the world, who stand at the base of the economic pyramid (BOP) have purchasing power of $5 trillion (Rs 2,25,00,000 crore) according to a new report released on Monday by the International Finance Corporation (IFC), the private sector arm of the World Bank.

The report, The Next 4 Billion: Market Size and Business Strategy at the Base of the Pyramid, measures the purchasing power of those with incomes below $ 3000 a year, using income and expenditure data from household surveys.

The BOP market in Asia (including West Asia) is by far the largest: 2.86 billion people in 19 countries, or 83 per cent of the entire population of these countries, have an aggregate income of $3.47 trillion, or 42 per cent of these countries’ total purchasing power. In rural areas the BOP comprises the majority of the market ? 76 per cent of aggregate household income in rural China and effectively 100 per cent in rural India and rural Indonesia.

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Source: The Hindustan Times (link opens in a new window)