Consumer Market Flashpoints: Rising Inequality

October 2023

In the upcoming years, consumers and businesses face an array of challenges, with rising income inequality being among the key ones. Nevertheless, addressing the income inequality through catering to the Bottom of the Pyramid and the Middle Class consumers also presents growth opportunities. This briefing shortlists strategies for companies that act proactively and address rising inequality early on.

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This report comes in PPT.

Key findings

Rising inequality has direct impact on businesses

Rising inequality has the potential to polarise the market into a high-income consumer segment at the top and a low-income segment at the bottom. It has serious consequences for social stability and economic growth, constraining the consumer base and consumer spending.

The bottom of the pyramid gains importance

The bottom of the pyramid (BoP) is not all about developing countries. In developed markets, the size of the BoP is significant and has in recent years been expanding due to rising income inequality. By addressing the needs and wants of the low-earning consumers companies unleash this untapped potential.

But it’s not a race to the bottom

Rising income inequality reduces the size and purchasing power of the middle class, but doubling down on meeting the changing needs of middle-class consumers can help businesses boost revenues.

A matter of responsibility and reputation

Businesses have a critical role in reducing inequality, not only because of their capacity to drive positive change but also because addressing income inequality positively impacts business reputation and directly benefits the corporate bottom line.

Actions by business to tackle income inequality

Some specific actions for businesses to take to effectively tackle income inequality include adopting fair and inclusive business practices within the workplace, marketplace and supply chain, and developing a comprehensive CSR strategy that aligns with the company’s core values.

Key findings
Rising inequality is a flashpoint with fundamental and direct impacts on businesses
Rising inequality means more attention to the bottom of the pyramid
Spending patterns of low-income consumers
The BoP is not a homogenous market
Kindroom lets renters swap skills for housing
Moni builds business model on community and trust
Addi facilitates more convenient payment solutions for Brazilian BoP
Strategies that work with BoP consumers
The middle class still matters greatly
Competing solely on low prices can lead to a race to the bottom
Walmart understands that middle-class households prize convenience as much as price
2nd Street thriving on quality and value
Chosen Ones by TG taps into Indian middle-income consumers’ interest in reusing
Serving the squeezed middle class
Business has a crucial role to play in reducing inequality
Ansaar Management Company caters to BoP need for housing
Tony’s Chocolonely missions for a 100% slave-free supply chain
The Coca-Cola Foundation addresses food insecurity in Sri Lanka
Actions to help tackle inequality and enhance business reputation
Key takeaways
Rising inequality: How to win


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