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BoP Markets as the Biggest Untapped Business Opportunity

As illustrated by the case of Mariam, most people living at the bottom of the pyramid are in The Survival Trap and forced to make difficult choices.

While awareness of opportunities in BoP markets has increased following C. K. Prahalad's work, these opportunities remain unclear to the majority of business executives and leaders.

It is therefore important to revisit the global importance of BoP markets. Those most affected by The Survival Trap are those at the BoP, those that Prahalad has characterized as an untapped and potentially highly profitable market segment.

The base of the pyramid has productive and entrepreneurial capabilities, as well as representing a massive purchasing force with significant unmet needs for goods and services. If the productivity of this group is harnessed, the impact could be the game changer needed to once and for all alter the dynamic whereby the majority of humanity remains poor.

Characterized by income below $3,000 per annum, BoP citizens number four billion people throughout the world. The four billion people who live in relative poverty have purchasing power representing a $5 trillion market, according to a report by the IFC, the private sector arm of the World Bank Group, and World Resources Institute (WRI).2 Figure 1.2 offers a breakdown of this market across regions.

Figure 1.2

Figure 1.2 BoP income by region

The second thing to consider is that the BoP has spending preferences reflected in how it allocates its budget on different services. While food comes on top with almost $3 trillion or 60 percent of all spending, energy ($433 billion), housing ($332 billion), and transportation ($179 billion) represent big opportunities.3

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