(Seeing as I am here in Kenya working in international development, this post is the first of several where I’m going to consider my experiences through a slightly more academic lens. Hopefully it’s still interesting. If you’re looking for photos and a more narrative-y discussion of my first full week, check back Monday, when I’ll have better internet.)
While driving up the highway from Nairobi to Nanyuki, our matatu (bus/van) passed by a number of slums, and other neighborhoods that were clearly very poor. One of the things that struck me about the experience was how commercialized it was by a few brands. In the midst of several of the slums, there were restaurants selling Coca-Cola, bars offering Tusker (the local beer) and, perhaps more than anything else, shops from the telecommunications provider Safaricom, offering mobile phone services, and MPESA (a payment system via your cell phone that I’ll almost certainly commit an entire blog post into the future).
When pictures or discussions of slums are presented in news sources, on tv, or are featured by NGOs to compel people to donate, the vulnerability of the individuals living there is almost always the point of emphasis. It’s much more common to hear a discussion about how unfortunate it is that they don’t have running water than it is to hear about the sort of business opportunities available by selling to them.
And yet, looking at the stores that are available to them suggest that, unsurprisingly, those living in vulnerable conditions have the same sort of preferences as individuals living in much high income settings. Taking stock of any strip mall in middle-class America will almost certainly show similar products—restaurants, places selling drinks, stores with tech products, somewhere to withdraw money. While none of these services is hailed as a bringer-about of social transformation, I think it’s safe to say that the availability of these products and services makes our lives better, by offering us more choices on things we want.
I think the same is true of products like Coca-Cola. While you can criticize the nutritional value of soda and say that it’d be better if those same people could buy healthier products, Coke is offering a product that people want to a market where few large-scale producers will enter. It is my hope that over time, more large firms will see low-income individuals as a market worth investing in. Even if they have a lot less money than the average customer in a wealthier nation, they still have money, they still have things they want, meaning there is a market to be had.
A great example of tailoring products that I read about took place in India, with Johnson and Johnson. They began selling single-serving shampoos to low-income customers there, to great success. While at first blush, it seems like an odd product, a more thorough consideration proves it to be a logical product. Imagine you are living day-to-day. While having shampooed hair is a nice thing to have, it’s probably not at the very top of your priority list, as far as investments to make. If you’re unsure as to whether or not you’ll have enough to make more essential purchases in the future, it’s really hard to justify investing in a massive container of shampoo. However, in situations where you do have a surplus, a single-serving shampoo is something you can buy, without having to worry about having a bunch of excess shampoo in times that are leaner.
Like Johnson and Johnson and like cell phone service providers, there are all sorts of products that the poor are likely to want, where they are not considered buyers because of their income limitations. However, through clever adaptations like Johnson and Johnson, there are ways to tailor products to the needs of the would-be customers and to make them affordable. There are, all told, more than 2 billion people living under $2 a day, many of whom living in densely populated, urban settings. By making customers out of the poor, it’s possible to make a profit while simultaneously improving their freedom of choice, and therefore the quality of their life.