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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Maurice Winn who wrote (15831)	3/23/2007 4:46:00 AM
From: elmatador	Respond to of 218166

"The Next 4 Billion -- Market Size and Business Strategy at the Base of the Pyramid" Report sees untapped market among world's poor 2007/3/21 WASHINGTON, AP Four billion low-income consumers represent a potential US$5 trillion (euro3.75 trillion) market that remains largely untapped because their needs are ignored, a report by the World Bank's private sector arm and a policy research group said Monday. The subjects of "The Next 4 Billion -- Market Size and Business Strategy at the Base of the Pyramid" are the segment of the world's population who are slightly better off than the estimated 1.2 billion who live on less than US$1 (euro.75) a day, the World Bank's definition of abject poverty. A market-oriented approach by companies catering to people living at the bottom of the economic pyramid could erase a penalty they face in the form of goods and services that are too expensive, are of low quality or are difficult or impossible to obtain, the report says. The International Finance Corporation, the World Bank's private sector arm, and the World Resources Institute, a private policy research group, produced the report. The analysis measures the size of the markets at the base of the pyramid, which it calls the BOP, using income and spending data from household surveys previously unavailable for public analysis. The report also includes a survey of business strategies from successful companies that operate in these markets. "This report shows how critical it is to focus on the BOP in all its dimensions," said Jonathan Lash, president of the World Resources Institute. "The BOP wins when brought into the formal economy. Business wins when it pays attention to the BOP." The report said traditional approaches to poverty reduction often focus on the very poor, working on the assumption that they are unable to help themselves and thus need charity or public assistance. "A market-based approach starts from the recognition that being poor does not eliminate commerce and market processes: virtually all poor (families) trade cash or labor to meet their basic needs," the report said. A market-based approach thus focuses on people as consumers and on solutions that can make markets more efficient, competitive and inclusive--so that the BOP can benefit from them. Examples of goods and services this approach can provide include cell phones, food, fuel and financial services. According to the report, the 4 billion people at the base of the economic pyramid -- all those with less than US$3,000 (euro2,250) in local purchasing power -- live in relative poverty. Their incomes are less than US$3.35 (euro2.50) a day in Brazil, US$2.11 (euro1.60) in China, US$1.89 (euro1.40) in Ghana and US$1.56 (euro1.15) in India, the report said. "Yet together they have substantial purchasing power: The BOP constitutes a US$5 trillion (euro3.75 trillion) global consumer market," the report said. BOP markets are often rural, underserved, dominated by the informal economy and consequently are relatively inefficient and uncompetitive, the report said. As greater numbers of companies compete to sell goods and services to these countries the poor experience a direct increase in quality of life. The report gives this snapshot of regions: Asia, including the Middle East, has by far the largest BOP market: 2.86 billion people with incomes of US$3.5 trillion (euro2.6 trillion). This BOP market represents 85 percent of the region's population and 42 percent of purchasing power, a significant share of Asia's rapidly growing consumer market. Eastern Europe's US$458 billion (euro343.7 billion) BOP market includes 254 million people, 64 percent of the population and 36 percent of the income. In Latin America the BOP market of US$509 million (euro382 million) includes 360 million people, 64 percent of the region's population but only 28 percent of total household income, a smaller share than in other regions. Africa has a slightly smaller BOP market, at US$429 billion (euro322 billion), but the BOP is by far the region's dominant consumer market with 71 percent of the purchasing power. It includes 486 million people, or 95 percent of the surveyed population.