Profitability in Rural Bottom of the Pyramid (BoP) Markets from a Business Perspective: Evidence from Sri Lanka

Abstract

The market-based approach to catering for the poor mainly focusses on companies making profits while helping the poor enhance their lives. This concept presented the possibility of there being a ‘fortune’ to make at the Bottom of the Pyramid (BoP) market that was an opportunity for both businesses and consumers. The notion of the BoP market has been widely studied using urban and rural contexts as distinct classifications; yet many argue that the opportunity does not in fact exist in the rural BoP markets. In this chapter the authors examine the prospects in the rural BoP in Sri Lanka through a qualitative study using insights provided by industry practitioners who operate at the BoP level. Findings show that a large percentage of the income of multinational companies is derived from rural BoP markets. Compared to the urban sector, the rural BoP market indicates relatively higher disposable income and is viewed as an attractive market segment by industry practitioners. The findings also show that rural BoP people have more resources and skills than their urban counterparts, although the former commonly have lower levels of education. Moreover, the youth segment in both the urban and rural BoP markets was found to heavily consume social media. The authors conclude their discussion by providing several key proposals for organisations looking to seize opportunities in this market.

Citation

Jayawickramarathna, W., Rahman, K., Mulye, R. and Fry, T. (2018), "Profitability in Rural Bottom of the Pyramid (BoP) Markets from a Business Perspective: Evidence from Sri Lanka", Singh, R. (Ed.) Bottom of the Pyramid Marketing: Making, Shaping and Developing BoP Markets (Marketing in Emerging Markets), Emerald Publishing Limited, Leeds, pp. 165-188. https://doi.org/10.1108/978-1-78714-555-920181010