The Bottom of the Urban Pyramid is the overlooked consumer group of hundreds of millions of people living in the world’s poor markets. Primarily, they are located in world cities and have low disposable income. They are now demanding innovations that fit their wants and needs creating excellent opportunities for global businesses, United Minds consultants Sandra Holmqvist and Andreas Befrits report from Dar es-Salaam, Tanzania.
As a result of the ongoing, rapid global urbanization, a new group of consumers that until previously was neither recognized nor appreciated, has emerged. They are known as Bottom of the Urban Pyramid consumers (BOUPs), a group consisting of the creative, yet struggling consumers with low levels of disposable income living in cities of the developing world.
In the past, BOUP consumers have often been dismissed as an unattractive and unprofitable target group. Nevertheless, they have aesthetic and materialistic requirements, just like everybody else, and demand solutions for health issues, lack of space and other problems that characterize life in developing world cities. More importantly, the size of this target group makes them a new frontier for actors willing to address them.
Although there are rich opportunities in targeting the world’s poor, finding out and dealing with their needs in a manner worth their money and effort requires consumer insight that is largely underdeveloped by companies used to focusing on well-off consumers in richer markets. Further consumer insight studies are required to map the needs and preferences of BOUPs. The question to companies willing to expand into this new market is really how much they are willing to learn.
