Unlocking Potential at the Bottom of the Pyramid in Emerging Markets

Bottom Of the Pyramid is of strategic importance

The Bottom of the Pyramid (BOP) is gaining strategic importance as a new growth avenue for companies and corporations worldwide, as they are struggling to survive and expand in the context of slowing economic growth, weak consumer expenditure, a squeezed middle class and increasing uncertainties. As well as establishing a new, substantial consumer base, by doing business at the BOP companies and corporations can help to eradicate poverty and reduce income inequality, which will positively impact the business environment of a country.

Major BOP markets

Euromonitor International has identified India, Nigeria, China, Indonesia and South Africa as the top five BOP markets in 2015. This selection was made on the evaluation of the BOP in total number of adults living on an annual disposable income below US$5,000 (on a purchasing power parity, PPP, basis) and a net wealth of less than US$10,000 (PPP) and as a share of the adult population. In 2030, Brazil is expected to emerge as one of the top five BOP markets (replacing Indonesia), as it will have one of the largest BOPs as a share of the total adult population.

Key sector markets

Business opportunities at the BOP are abundant in seven key sectors: food, housing, transport, energy, communications, financial services and healthcare. As the BOP is often neglected, consumer needs have always existed in these key sectors (and beyond) and so what is required of companies is to identify those needs and create markets from existing needs. Understanding this insight is an important first step in making the BOP a core strategy and transforming the way companies do business.