Whenever I go into a Walmart, my mind goes through a similar pattern of thoughts and emotions. First there is the guilt at shopping at the “Big Bad” due to its labor practices. Then when I look at the prices, there is acknowledgment that Wal-mart helps folks of limited means afford “basic goods”. Basic goods is in quotes because I’m including not just things like shampoo or a loaf of bread, but also consumer electronics that are key to rupturing the digital divide.
This is why this recent article from IHT struck a chord: Chinese goods transform life in Southeast Asia.
Cheap Chinese products are flooding China’s southern neighbors and consumers in Myanmar, Laos, Vietnam and Cambodia are laying out the welcome mat.
The products are transforming the lives of some of the poorest people in Asia, whose worldly possessions only a few years ago typically consisted of not much more than a set or two of clothes, cooking utensils and a thatch-roofed house built by hand.
The concerns in the West about the safety of Chinese toys and pet food are largely moot for the people living in the remote villages here, although some residents complain about quality. As the first introduction to global capitalism, Chinese products are met with deep appreciation.
This led to another whole series of thoughts and emotions. First: “That’s great! Hurray for the poor being able to enjoy a better quality of life.” Followed by “Hang on a tick. Increased global consumption can spell doom for humanity! Rounding up with “Chinese manufacturers have stepped in to provide much-needed goods and services to people at the bottom of the pyramid. What is needed is for companies with a strong focus on the environment and sustainability to move into that market as well”.
A recent report from BCG doesn’t talk about the sustainability angle, but gives sound advice about how to sell to the BOP [via PSD Blog].
Design and develop products with functions and prices that compensate for small living spaces, unreliable utilities, limited budgets and other constraints
- Leverage “ubiquitous distributions” by partnering with existing networks, such as the postal service, to ensure broad coverage, low cost, and reasonable control
- Design educational marketing programs that explain the importance of a productâ€™s benefits and that foster new demand [â€¦]
- Unleash the organization: establish clear accountability for serving the next b8illion, encourage growth over short-term profitability, foster innovation, and embed low-cost processes
- Collaborate with companies from other industries (even with competitors, on occasion) to enhance consumer programs (such as easy financing) and improve scale economics (for example, by sharing distribution costs)