Cases
A number of companies have created new opportunities for the people at the bottom of the pyramid by innovating products targeting basic needs along with business models developed with the local culture in mind, making it a commercial success in many cases.
Interview: Grundfos LIFELINK
Grundfos has developed an innovative business model and a successful product through persistence. Grundfos LIFELINK supplies safe and affordable drinking water for rural communities in Africa. Peter Todbjerg Hansen (Managing Director at Grundfos LIFELINK) shares the experience of Grundfos with the BOP Learning Lab.
Unilever: Iodised salt gain 50% market share
Unilever produces a range of products for BOP markets, for example Annapurna Salt, which is a fortified salt product. The product is target towards the poor in developing countries, where iodine deficiency is a big problem. The salt is sold in small, cheap packages by a distribution network that focuses on educating the consumers of the health benefits achieved by using the product. In Ghana Unilever has managed to gain a 50 pct. market share in three years.
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Britannia Industries Ltd: Fortified biscuits
The biscuits manufacture Britannia Industries (BI) has in cooperation with the Indian NGO The Naandi Foundation and the Global Alliance for Improved Nutrition (GAIN) developed a fortified biscuit for children in schools. The expansive infrastructure of Naandi’s food program for school children enabled BI to distribute the product to the target group. Since reaching the target group through the cooperation, BI has successfully sold the product to commercial BOP markets in India.
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Solar Home Systems
A project approach initiated by many in the BOP segment is the Solar Home System - or SHS. The system often consists of a solar panel, a car-battery, wires, and some LED lights. Even smaller SHS are implemented, like lanterns with integrated solar panels, but also larger systems with additional power for radios or other appliances.
A successful example is the Solar Energy Foundation (SEF) initiative in Ethiopia. The initiative includes the sale of two different sized systems, 50 franchised solar centres providing technicians for installation and service, microfinance services, and collaboration with good local institutions and local communities. The target group includes schools, water pumping utilities, and households.
Restructuring grid payment systems and additional microcredit
A successful project that targets another segment of the BOP is the Codensa Slum Electricity grid connection project. The project made available microcredits for electrical appliances and insurances for the connected customers in slum areas. The microcredits were offered to poor customers to buy electrical appliances.
Another successful project is the CONLOG pre-pay metering project in Sudan. The project encompassed the installation of over one million prepayment meters in Khartoum to existing customers as well as to new customers. It benefitted both the electrical consumers who now have regular, safe, and reliable electrical service, and the utility company eliminated its debt of USD 70 million from unpaid bills.