Wednesday, August 20, 2008

BoP shock for India?

Got this from Emerging Futures lab (Hi Niti) where the news is that Indias BoP population has been pared down from 400 million to 160 million. The rest (240 mio), are too costly to serve, or so says the piece.

Jain points out that financial services, FMCG etc should be the ones entering such a market and the BOP market may not be for everyone.

To me this is a mindset problem (as commented at Emerging Futures). Whoever thought cellphones could be so cheap - not yet BoP cheap, but cheap nonetheless. When you go with your existing bag of tricks, it is obviously true. But with a different model, different services and, well, a different mindset it is possible. Obviously, profits are not going to be same in Malabar Hill as they would be in Dharavi or Raigada (Orissa).

Yes, the companies need to decide whether they need to serve this market. Cellcos faced this and cracked it by and large. The others too can decide...

2 comments:

niti bhan said...

Although, just to be an argumentative indian, let us take a moment to look at this point from another angle. I was discussing our conversation (yours and mine) with dave and he pointed out that cellphones are unique in that they have been one of the few high tech devices to diffuse through the developing world regardless of infrastructure, like electricity, wiring etc due to the nature of the wireless requirements. And they are rapidly becoming an essential or necessity, as much as roti, kapda or makan to the aam admi as well as bop primarily because they are such a powerful little device - connector, income generator etc.

However, can one then say the same for other products which are not in the same league but simply 'purchases' rather than 'investments' such as a television set or 3 in one? Of course a moped or scooter, as you have shown, helps business too.

Just musing...

Neelakantan said...

Perhaps the key to selling to BoP is to sell from an investment angle - that helps them get out of the bottom. Connectors, income generators, better raw materials for their small business.

Not sure if they need to buy a television at all :)