Reaching deep in low-income markets: Enterprises achieving impact, sustainability, and scale at the base of the pyramid
This report (PDF) by Deloitte covers 20 well-established inclusive businesses and explores whether and how businesses can reach ‘down pyramid’. Most enterprises that were studied are able to reach base of the pyramid (BOP) populations with critical goods and services and some are able to reach surprisingly deep. Many of these enterprises are operating fairly successfully, both in terms of financial viability and growth. Being asset heavy and selling a push product does not necessarily prevent companies from reaching the BOP in a financially sustainable way. Moreover, selling to customers across a broader range of incomes is clearly possible. Regardless of sector or products sold, enterprises can improve their chances for success by using a number of common business model design tactics. Most enterprises in the study received some form of subsidized capital, which was often very helpful in mitigating start-up risks as well as navigating the challenges inherent in BOP markets. It was often received at an early stage and then replaced by more market-rate capital, suggesting subsidy does not preclude businesses from eventually becoming self-sustaining. While all the enterprises researched had an obvious social impact from the goods or services sold to BOP customers (access to finance, greater food security, etc.), these enterprises also yielded a number of less obvious development benefits. Based on the research, supporting for-profit enterprises that provide needed goods and services to the poor is a viable way to drive a development agenda.
Please read more about the report in this blog.