Four billion low-income consumers, a majority of the world’s population, constitute the base of the economic pyramid (BOP). New empirical measures of their aggregate purchasing power and their behavior as consumers suggest significant opportunities for market-based approaches to: better meet their needs, increase their productivity and incomes, and empower their entry into the formal economy.

Four billion low-income consumers, a majority of the world’s population, constitute the base of the economic pyramid (BOP).

New empirical measures of their aggregate purchasing power and their behavior as consumers suggest significant opportunities for market-based approaches to:

better meet their needs,

increase their productivity and incomes, and

empower their entry into the formal economy.

The Energy Market The Next 4 Billion: Market Size and Business Strategy at the Base of the Pyramid http://www.wri.org/thenext4billion

BOP households devote an average of 7% of their expenditures to energy. In most measured countries, the share of household spending devoted to energy does not change significantly as incomes rise.

Patterns of fuel use vary across income groups as well as between rural and urban areas. In Africa, Asia, and Latin America firewood is the main fuel source used for cooking in the lower BOP income groups.

Africa’s BOP energy markets maintain a roughly even split between urban and rural areas. Asia’s markets, in contrast, are decidedly skewed toward rural areas.

Overall, 36% of BOP households lack access to electricity – while only 6% of mid-market households lack access. Reported access rates are 51% in the BOP500 income segment, 63% in BOP1000, and 74% in BOP1500.

In Africa, rural BOP households spend only a third as much on energy as their urban counterparts on average, the largest such discrepancy among regions.