The largest market in Latin America is comprised of people who earn less than US$3,000 per year. These 360 million people, out of the region’s 550 million, represent the Base of the Pyramid (BoP) market. While the purchasing power of any one family at the BoP may be low, in aggregate the market is estimated at US$510 Billion a year. In Mexico, where IGNIA is headquartered, the BoP market is projected at US$130 billion and, similar to the rest of the region, accounts for over 70% of the population.
Multiple reasons, often present for various generations, have resulted in a population at the BoP that accesses goods and services at a significant disadvantage. This is the case whether the low-income person is acting as a consumer of goods and services (including for essential items such as healthcare, housing and water) or as a productive agent (where the need may be for credit, equipment, logistics or technical know-how). Many factors cause, and then help perpetuate, the disadvantages faced by low income people. As Professor V. Kasturi Rangan of the Harvard Business School has observed, among these are:
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This has resulted in two signature characteristics at the BoP:
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*Data on population and market size referenced one this page are from the World Bank Group report
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LIFE AT THE BOP
"Only business can ensure that a high impact intervention at the base of the pyramid will reach everybody that needs it, across generations, while getting better and costing less - so long as it achieves the commercial returns that attract eager entrants to create new industries.”
Michael Chu
Co-Founder, IGNIA Fund
