New Markets, New Mindsets: Creating wealth with South Africa's lowincome communities through partnership and innovation
Doing business with lowincome communities – which academics and practitioners have christened ‘the base of the pyramid’ (BoP) – now includes a focus on creating sustainable markets with the potential to realise future profit – simply ‘milking’ a market for the next quarter’s profits is seen as shortsighted. The status quo is shifting, and the rules of both commercial and social engagement with middle and lowerend markets in developing economies are transforming. There is keen interest from both local and global businesses and institutions to be involved in these markets. And they care about the practical detail of doing it effectively, and ethically. This new view accords that doing business in a healthier economy benefits firms by lowering transaction costs and the longterm cost of capital. In South Africa, around 6% of the population is unserved or underserved by current business (and many other providers of support and services). That’s a significant new market, and in the South African context, doing business in this market can achieve a great deal more than simply finding new customers. Regardless of global trends or government pressures, accessing these markets is challenging. Often, customers who survive on minimal incomes seek and will value different market offerings from those traditional customers have purchased. They have unique needs and identities requiring innovative, nontraditional business models and approaches.
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