Exploring inclusive business solutions in emerging markets: Global Consumption Database launched by the World Bank Group

Companies seeking to expand in emerging markets increasingly see the 4.5 billion people at the so-called base of the economic pyramid (BOP) as potentially important customers, diverse new sources of supply, and strategic distribution and retail partners. But they often struggle to find even basic data to inform their strategy.

Published: Mon, May 12, 2014
Author: Filippo Veglio
Type: Insight

To help with early-stage research and analysis of inclusive business opportunities, the World Bank Group has released the most comprehensive dataset to date on consumer spending patterns in developing countries, compiled from surveys of more than a million households around the world.

Consumption data can help companies size up existing demand and willingness to pay in particular product and service categories. Businesses can also identify categories where demand may be latent, requiring greater investment and partnership to unlock. Lastly, data clarifies the needs for more in-depth, context-specific market research to evaluate specific opportunities.

According to Jin-Yong Cai, Executive Vice President and CEO of the International Finance Corporation (IFC): “By making data on spending freely available in a form that is useful to the private sector, we aim to lower the up-front cost of exploring inclusive business opportunities—reducing a critical barrier to investment and accelerating the pace of inclusive business development around the world.”

Via the Global Consumption Database, users can access spending numbers, view graphs and tables, and download data for analysis. The data can be broken down in several ways:

  • By country—for 92 developing countries and emerging markets
  • By location—for rural and urban locations
  • By consumption segment—for lowest, low, middle, and higher
  • By sector—for 12 sectors including food and beverage, housing, clothing and footwear, energy, transport, health, information and communications technology, education, personal care, water utility, financial services
  • By category—for 25 sub-sector level categories, including dairy, grains, meat and fish, and fruits and vegetables within the food and beverage sector
  • Specific products and services—for 107 detailed sub-category items, including fresh milk, preserved milk, eggs, butter, and cheese within the dairy category

Some insights in short

- According to IFC, the 4.5 billion people at the BOP spend some US$5 trillion in the aggregate, based on 2005 purchasing power parity dollar terms for lowest and low consumption segments in the 92 sample countries. This is more than half of all consumer spending in developing countries and emerging markets. The BOP spends $2.3 trillion a year on food and beverages alone.

- The BOP is a diverse group: it encompasses 3 billion people spending less than $3 a day and 1.5 billion people spending up to US$9; 1.7 billion people at the BOP live in crowded urban environments and 2.8 billion in vast rural areas; and men and women of all ages, backgrounds, and preferences. This means that inclusive business solutions require different products, marketing strategies, distribution channels, and pricing and payment options.

- The BOP is young, offering great potential for companies willing to invest. People at the BOP are younger on average than those in higher consumption segments—44% are under age 20, and 61% under age 30. Young people are particularly open to new products, services, and business models—especially technology-enabled ones—creating a big opportunity to engage them as customers, suppliers, distributors, retailers, and employees.

About the Global Consumption Database

The database is a one-stop source of data on household consumption patterns in developing countries. It is designed to serve a wide range of users – from researchers seeking data for analytical studies to businesses seeking a better understanding of the markets into which they are expanding or those they are already serving.

The data are based on national household surveys, which collect information for a group of households representative of the entire country. For each of the countries covered, the resulting datasets have been used to calculate the share of the population at different levels of consumption.

Four levels of consumption are used to segment the market in each country: lowest, low, middle, and higher. They are based on global income distribution data, which rank the global population by income per capita. The lowest consumption segment corresponds to the bottom half of the global distribution, or the 50th percentile and below; the low consumption segment to the 51th–75th percentiles; the middle consumption segment to the 76th–90th percentiles; and the higher consumption segment to the 91st percentile and above.

The Global Consumption Database is the most comprehensive data source to date on consumer spending patterns in developing countries. It builds on the 2007 report The Next 4 Billion, published by IFC and the World Resources Institute.

The database will be periodically updated as new data become available.

More information

  • Download this brochure with highlights from the database and a few examples of IFC clients that tap into markets at the base of the pyramid.
  • Fact sheet on IFC’s Inclusive Business Models Group