Bottom-of-the-pyramid Once Again In Focus

Context: An overview of the changing paradigm of India Inc, post the COVID-19 pandemic.

Implications of pandemic-led economic shock

• Shrunk middle class by 32 million: According to a recent report by Pew Research Centre based on World Bank data, there is a loss of one-third of the middle class.
  • It defines poor with an income or consumption of under $2 per day, low-income between $2.01 and $10, and middle class between $10.01 and $20.
• Change in consumer income pyramid: has huge implications for all sorts of marketers, anything from colas to cars, leading to an increased focus on the Bottom-of-the-pyramid.
  • Growth profile shifting to rural India: due to higher farm income coupled with the presence of millions of migrant returnees.
  • While the Bottom-of-the-pyramid, a concept of treating dirt-poor people as profitable, fails in the long term since the rise in poverty will ultimately reduce the consumption of goods.
• Continuing migrant crisis: Recent surge adding to the delay of the return of migrants.

Way forward: Reorganizing the business/governance models in providing relief to the poor since if their incomes went further down, it is bad for both the businesses and the government.

• Expansion of successful models: For E.g.
  • Hindustan Unilever’s (HUL) programme, collaborating with rural women in distribution and in the process creating hundreds of thousands of “Shakti Ammas” in the 2000s.
  • ITC’s rural-focused click & mortar-trading platform in e-Choupal that enables over four million-odd farmers to buy and sell a host of products and commodities.
• Adaptation: HUL has already started speaking about providing living wages against minimum wages to all people who directly provide goods or services to it by 2030.