Market potential

In general, food dominates household budgets at the BOP. Other important items are housing, energy, and health care. As incomes rise, the share spent on communication and transportation grows accordingly.

The products and services available to the poor are typically ‘high-priced low-quality’. In other words, it is expensive to be poor. This is partly due to the traditionally limited competition in these markets, since only few companies target them. Therefore, there are significant market opportunities in South Africa for companies who can provide affordable solutions to meet the demand at the BOP.

Inadequate housing is a major problem in South Africa. The government has initiated large investment projects in housing for the poor. Nevertheless, 1.2 million households continue to live in informal settlements; one million households lack access to water, three million households lack access to adequate sanitation systems, and 3.3 million households lack access to electricity. This implies that there is a need for housing solutions and a demand through government investments.