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Reaching Consumers at the Bottom of the Pyramid

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The bottom of the pyramid (BoP) has become overshadowed by the emerging middle classes but it remains an important consumer group; which taken as a whole, represents a huge market. Nevertheless, this segment remains underserved and so opportunities abound particularly for those who can innovate to offer original and aspirational products and services.

A sizeable market

In 2013, in the 85 countries for which we have data (which are home to 87% of all households globally) there were 401 million households earning less than US$5,000 per year, by 2030 that number will fall to 205 million (in constant 2013 prices). Nevertheless this remains a sizeable market, expected to account for 1-in-10 households across these 85 countries in 2030.  To put this into context, this is a similar size in terms of the number of households, as Western Europe.

On an individual level these households of course have limited purchasing power – roughly US$14 per day or US$4 per household member per day - but that does not mean they should be overlooked. In India, the country with the largest number of sub-US$5,000 households, 52.3% of households fall into this category.

Countries with the Largest Number of Households with a Disposable Income of Less Than US$5,000: 2013


Source: Euromonitor International from national statistics/UN

Note: Data refer to a ranking of 85 large economies globally, accounting for 87% of the world’s households.

Bucking global trends, some of these countries are also seeing a strong increase in the number of low-income households -including Pakistan, Iran and Kenya; with these three countries adding a combined 7.7 million households between 2013 and 2030 to their ranks of those earning less than US$5,000.

Innovation counts

Key to success is to lower the cost of ownership whilst still offering quality and features that consumers aspire to. Small pack sizes are the obvious and most well-known method for consumer goods companies to target low-income consumers, but are not necessarily the best. Other innovations should also be employed, the basis of which should be formed by gaining a real understanding of what consumers really need by immersing the business in the local market. This immersion strategy increases the chances of creating a sustainable business model.

  • An example of one of the most well-rounded and thought out approaches is from Godrej and Boyce in India. The company has launched what has been fêted as the world’s cheapest refrigerator. It retails for US$69 and was designed to target poor, rural consumers. In a country with 854 million rural inhabitants this market is huge. The ChotuKool refrigerator looks from the outside like a box, consumes half the electricity of a standard refrigerator, and, importantly in a country which suffers power outages, it also stays cool for hours with no power, due to its superior insulation. It was designed with input from village women and is linked to microfinance organisations which means families can purchase it on credit;
  • Éxito, the market-leading supermarket in Colombia, offers store cards to its shoppers. The Éxito Origen credit card can be obtained by cardholders without a banking history or formal income. The lowest-earning 10% of households in Colombia spent 35% of their total budgets on food and non-alcoholic beverages in 2013 – or US$1.3 billion. The Éxito brand had 12.0% of the grocery market in that same year in part due to its ability to target the whole cross section of the country’s consumers;

Real Growth in Grocery Retailers: 2008-2013


Source: Euromonitor International from trade sources/national statistics

Note: Data refer to real growth in retail value RSP excluding sales tax


  • Global Alimentos SAC is the leading breakfast cereal player in Peru with a 58% value share of the market in 2013. It focuses on innovation and offers smaller pack sizes, incorporating Andean cereals into its offer as well as having an impressive distribution network. This ensures that its products are available throughout the country, even in rural areas, and in traditional sales channels like independent small grocers, in order to reach BoP consumers;
  • South Africa’s Promasidor, through its Cowbell brand, provides milk powder in small portions packaged in sachets. By removing the animal fat from the milk and replacing it with vegetable fat Cowbell allows for a longer shelf life. These two innovations mean that Cowbell is sold across Africa including in Nigeria, Kenya and Malawi; in countries where households are without refrigeration and suffer from irregular power supplies and in countries where fresh liquid milk is not available.

Profit from quality and aspiration

With increasing pressure on margins, and consumers continuing to suffer from tightened purse strings, business cannot afford to ignore households earning less than US$5,000 per annum. That’s not to say that making a profit at the bottom of the pyramid is easy, it’s not. Barriers to success at the BoP can be overcome by those who work hard to understand the consumer and are flexible – for example by being willing to change the business model, create new products and services and even entire categories. Serving quality brands to aspirational consumers at the BoP is a goal in itself but it can also lead to innovations which can be rolled out globally and to a range of income segments. A win-win scenario for business.


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