The next 4 billion

Slideshow Transcript

1. Slide 1: The Next 4 Billion Market Size and Business Strategy at the Base of the Pyramid “Business With Four Billion” Conference Ann Arbor, MI September 9, 2007 Allen L. Hammond World Resources Institute
2. Slide 2: About World Resources Institute • Worldwide reach – we work on global environment and development issues, on the ground in over 80 countries • Extensive experience with entrepreneurs - a portfolio of 150 companies…in Brazil, China, India, Indonesia, and Mexico • Extensive local partnerships - that build capacity and co-create opportunity with Ngos, community leaders, local governments, local small and medium businesses • MNC partnerships – With selected companies (Intel, Microsoft, Vodafone, Citigroup…)
3. Slide 3: Why The Next 4 Billion Report?
4. Slide 4: Defining low-income communities as a market: The Next 4 Billion report • To move from anecdotes to hard data for the “poverty” market—the base of the pyramid • Based on official data from national household surveys in 110 countries —1st time publicly available • Documents business strategies that create value for companies—and for BOP producers and consumers
5. Slide 5: 4 billion people 72% of world population Poor by any measure <$3000/y PPP Poorly served unmet needs informality trap BOP penalty UNCOMPETITIVE MARKETS
6. Slide 6: Why $3000?
7. Slide 7: Data Tutorial BOP = 72% of 5.575 billion people measured with surveys = 4 billion people $3000 PPP is <USD $3.35/day in Brazil $2.11/day in China $1.89/day in Ghana $1.56/day in India Poor by any definition Market size: $5 trillion PPP; $1.3 trillion USD
8. Slide 8: Data Tutorial (2) By comparison... Mid-market segment (MOP) • 1.4 billion people • Income: $3000-$20,000 PPP • Market size: $12.5 trillion PPP
9. Slide 9: Sample Country Comparisons India Brazil China Surveyed 2004 2002 2002 % Pop. 95% 70% 80% (total) (924 mil.) (124 mil.) (1046 mil.) % Rural 78% 22% n/a % Total Inc. 85% 34% 55% ($ PPP) ($1.2 tril.) (182 bill.) (1.6 tril.)
10. Slide 10: A $5 trillion BOP market
11. Slide 11: By region…
12. Slide 15: By country…
13. Slide 17: By urban/rural…
14. Slide 19: By sector…
15. Slide 20: By household, sector, and income segment…
16. Slide 21: Surprising patterns — showing latent demand
17. Slide 22: By business strategy… • BOP focus and innovation creation • Localizing value creation • Enabling access • Unconventional partnering
18. Slide 23: The message for business • Significant underserved markets • Can be served profitably —this report documents the BOP willingness to pay for quality service and products • Market opportunity. Both for entrepreneurs, large corporations, and investors
19. Slide 24: The message for investors and funders • Huge unmet human need in various sectors • Opportunity to develop a pipeline of investor- worthy deals through expanded enterprise incubation/development activities • The bottleneck is not investment $, but enterprise development capacity • Only market-based approaches can scale to meet the needs of 4 billion consumers
20. Slide 25: WRI’s BOP Strategy Market Research Identify transformative sector strategies Scale enterprise development Engage capital markets
21. Slide 26: A sector analysis--Health
22. Slide 29: A “Last Mile” model for the health sector: Mi Farmacita
23. Slide 30: HealthStore and Medicine Shoppe
24. Slide 31: A sector analysis—Information and Communications Technology $8 billion
25. Slide 32: The missing rural market…
26. Slide 33: A New Model for Rural Connectivity--Vietnam Pilot • Advanced WiFi mesh + VOIP + WiFi- enabled phone • New Intel-backed WiFi backhaul • Voice-accessible applications in local languages • Radically lower capex: < $3/person
27. Slide 34: Quang Ngai Pilot, Vietnam • 1 million people, 159 rural communes, 3% phone ownership, very poor province. • Radically lower cost—replacing a $100,000+ cell tower with a $20,000 WiFi infrastructure • Local phone calling and Internet access costs: <$1/household/year—extremely affordable • Cost of WiFi-enabled mobile phones: +$5 per phone in volume • A model for mobile network rural extension in many countries?
28. Slide 35: Quang Ngai, Vietnam, Pilot
29. Slide 36: Changing People’s Lives
30. Slide 37: For more information: Download or order The Next 4 Billion report http://www.nextbillion.net Thank you