Reaching out to the poor in emerging markets has long been a laudable social goal. But in India today, it also represents the biggest business opportunity of the coming decade. While a number of obstacles stand in the way, some manufacturers are finding ways to capture “inclusive growth” by reaching the lowest-income segments as both employees and consumers.
Inclusive growth has long been heralded as the key to reaching the poor and geographically remote. But more than that, it is on the brink of becoming a major opportunity for businesses in emerging markets in the next decade. Such growth embraces the have-nots of society and brings them into the mainstream of the economic system as customers, employees, distributors and intermediaries. Over time, these groups climb the economic ladder and form the backbone of the middle class.
To do business in this market, companies must make products and services available not just at low cost but at ultra-low cost – requiring innovative manufacturing, marketing and delivery solutions. The challenges presented by these and other hard business realities have proved daunting in the past. In India, it’s critical that those challenges be met. The obstacles they face, and their efforts to overcome them, hold lessons for companies throughout emerging, high-growth markets.
At a time when the global economy is still shaky, India’s business frontier lies in the thousands of small towns and tiny villages in the countryside as well as in the many poor sections of cities. Armed with the latest information and communication technologies, Indian manufacturers now have the means as well as the motive to reach the hundreds of millions of India’s poor – and to use innovative business models to drive inclusive growth.