Isn’t
it ironic how aspiring entrepreneurs and start-ups would always tell others
that the main reason why they want to enter business is that they want to help
the poor, but end up just growing their profit instead? Aren’t they akin to politicians
and the so-called public servants who promised to help the poor if they get
elected or appointed to office but eventually got eaten by the system and
forgotten their promise?
Multi-
national corporations, often have this kind of purpose in their infancy stage-
to help the poor by producing and providing affordable goods and services.
However, as they grow bigger, they also leave behind this commitment and focus
instead on producing products that only the rich or Tier 1 consumers can
benefit from. Why would they sell products to the poor knowing that these
consumers can’t afford them? Why would they involve themselves with the BoP at
all? Shouldn’t the government or NGO’s take care of them instead?
This
kind of mentality and many other orthodoxies contribute to the ever-widening
margin between the Tier 1 and Tier 4 segments of the pyramid. The BoP is left
behind wallowing in poverty while Tier 1 continues to enjoy wealth.
Fortunately, there is now a growing trend among MNCs who are veering away from these
traditional frames of thinking, and are recognizing the potential of the huge
but untapped, undeveloped and unpenetrated BoP market. Those who pioneered in
exploring these previously uncharted territories are now ripping the fruits of
their experiment with large profit margins while helping marginalized people
through affordable and accessible products. They have proven that doing
business with the poor is profitable and sustainable.
Meanwhile,
many challenges await those who wish to unlock this massive potential because
the so-called Triple Bottom Line approach (People, Planet, Profit) is easier
said than done. For start- ups, the challenge is on developing sustainable
business models that would promote economic involvement among the masses. For
established MNCs, the question is whether to stick to their existing models or
develop new ones and take on the challenge. How do they integrate and take
advantage of the human dimension to create a sustainable business with the BoP?
What kind of innovations do they need to undertake? How do they create affordable,
accessible and innovative solutions that would benefit and deliver the maximum value
to the BoP? How do they promote and deliver it to the consumers?
For
development managers, the challenge rests on persuading and co-opting leaders
of the business industry to focus on the Tier 4 market. How do we convince them
to partner with government, non- government and civil-society organizations as
they expand their economic base so that economic development trickles down to
the poor? What interventions are needed so that we can “teach them how to fish”
instead of just giving them fish? How do we promote the “trade not aid” concept
to narrow the gap between the classes without necessarily and radically
disrupting the socio- cultural aspects of their lives? And the list of
challenges goes on.
