Global Compact Network Singapore and Singapore Business Federation recently held a standing networking series on 28 July 2017, on "Business Opportunities at the Bottom of the Pyramid (BoP)". Guest speaker, Mr Jack Sim, shared on the market opportunities that lie at the bottom of the pyramid, how companies can engage with BoP communities and the role of different stakeholders including NGOs in brining about sustainable development for all.
The world economic pyramid is divided into three parts; the affluent consumers enjoying an annual per capita income in excess of US$20,000 at the top, the middle class population and the bottom of the pyramid that features the largest, yet poorest people surviving on less than USD$1,500 per year. There is a common view that due to the vast difference in purchasing power, the BoP is not a viable market for global firms. However, contratian view and experience of some multi-nationals demonstrate that in reality, the BoP represents a multitrillion-dollar market owing to its sheer size.
The needs of the people at the BoP is massive, ranging from clean drinking water to solar energy and all enterprises should start learning how to serve these 4 billion new customers. Companies that want to tap into this market segment must strike a balance between profit-creation and value-creation for BoP consumers i.e. they need to be viewed as market with specific needs of their own. The business strategy must be geared towards the development of products and services that address the fundamental problems of poverty and sustainable development. BoP communities ought to be regarded as business partners, not just passive consumers.
Some of the questions addressed during the event were:
- What are the kind of opportunities that businesses can tap on in the BoP market segment in Asia using tangible examples
- What are the more effective ways to engage with BoP communities so as to best understand their needs
- How do I get started in a business that targets the BoP nd what are the available support to tap on
- Apart from commercial aspects, why must businesses in Singapore be concerned about BoP communities especially given that the Singapore society is reasonably well developed
Special thanks to our collaborators, World Toilet Organisation and BoP Hub, and Asian Venture Network Philanthrophy (AVPN) for their support.