Markets of the Poor: Opportunities and Limits

Abstract

Markets of the poor have attracted much attention in recent years. Unfortunately, there are very few examples of profitable businesses that market socially useful goods in low-income markets and operate at a large scale. However, there are many examples of businesses that profit by exploiting the poor, such as tobacco. Some constraints on free markets are needed to protect the vulnerable consumers—these are the limits to markets of the poor. The poor have many basic needs that continue to be unsatisfied—these are the opportunities offered by the markets of the poor. But, these are not easy opportunities. The challenge is to design profitable business models that sell products and services that benefit the poor and genuinely improve the quality of their lives, at prices they can truly afford. It is necessary to reduce quality in order to reduce costs significantly in most cases, but in such a way that the cost–quality trade-off is acceptable to poor consumers.