The Fortune at the Top of the Pyramid: Why the BoP should care about profiting from the ToP Aishwarya Lakshmi Ratan, Microsoft Research India ‘BoP in Practice’ workshop, IMTFI, June 1, 2009 Pantene shampoo sachet, $0.06 Gucci embroidered handbag, $2905 Overview
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Aishwarya Lakshmi Ratan, Microsoft Research India
‘BoP in Practice’ workshop, IMTFI, June 1, 2009
Gucci embroidered handbag, $2905
1 Billion People (> $5)
2 Billion People ($2-$5)
3.5 Billion People (<$2)ToP Producers BoP Consumers
But to what extent can lowering the cost of consumption
at $2 a day incomes eradicate poverty?
Figure source: Edelweiss Research
Prahalad 2004; Hammond 2007
Is the supply of labour and primary commodities the only way that the BoP can participate in markets?
Karnani 2007, 2009
Photos: Indrani Medhi, Rikin Gandhi, Jonathan Donner, Aishwarya Ratan
Krishna et al, 2003, 2004, 2005, 2006
“Diversification of income sources was mentioned as a principal reason in the corroborated accounts recorded for 35 per cent of escaping households. Accounted for in equal part by irregular, informal sector employment and by ancillary activities, especially dairying, such diversification of income sources is a very significant reason for escaping poverty in these villages, and it is almost as important in more industrialised Vadodara district as in less industrialised Sabarkantha district” (Krishna, 2005:19)
In India, the top 20% of the population is responsible for 45% of aggregate consumption.
BoP as Consumers
ToP as Consumers
Income streams of the rich steady and well-insured against numerous shocks
Rich actively seek differentiation from peers -drive consumption of luxury, custom-made goods
Rich consumer has sufficient surplus to consume in the present and invest in the future
Photo: PRADAN, Masuta
Photo: Indrani Medhi
Photo: PC Quest
Photo: Rikin Gandhi
Source: Rediff , PawanAgrawal, Sanjay Sawant