NRI Papers
No. 175 August 1, 2012
  Developing BoP Business as the Principal Strategy in Emerging and Developing Economies (Volume 2)
— Improving the Profitability of BoP Business in India and South Africa —
 
Shusuke WATANABE, Tokutaro HIRAMOTO and Naoya TSUZAKI

In this paper, in consideration of the following two types of markets -- (1) an enormous market that already exists (which involved 4.7 billion people and 5 trillion dollars as of 2005) and (2) an even more massive market that is projected to develop when the BoP segment becomes more affluent and moves into the MoP segment (which will consist of 5.5 billion people and be worth 70 trillion dollars by 2030), the authors selected countries that are considered well suited for the development of BoP business and classified these countries into three groups.

Specifically, we looked at Asian countries where many Japanese companies have already established a foothold, which makes it relatively easy for them to start BoP business in these countries. We also looked at African countries that have recently been attracting much attention worldwide because of their high economic growth. We classified these countries into three categories based on strength of economy, growth rate, population size, population dynamics and trends in the MoP market. The categories are: (1) mature, (2) rapidly growing and (3) showing signs of growth.

In this paper, by concentrating on a strategy that would take us to 2030, we have chosen India and South Africa as target countries for case studies from the "rapidly growing" category in the Asian and African regions.

Upon selecting these countries, we have discussed strategically important points in developing BoP business in India and South Africa. In specific terms, among the three elements of (1) impact, (2) insight and (3) dynamism that are needed to develop BoP business that will prosper, focus is given to "impact" that is necessary at the concept development stage. In order to identify the unique features of each target country, we took the approach of analyzing "who are the end customers," "what challenges must be addressed" and "what methods should be used" to provide solutions.

Contents
I Each Country Has Its Own Unique BoP Market
II Unique Features of Countries that Must be Considered When Creating BoP Business
III BoP Business in India
IV BoP Business in South Africa
V Incorporating Insight and Dynamism

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