In 2001, Prof C K Prahalad published “Fortune at the Bottom of the Pyramid” i.e poor people as untapped markets for corporations. His idea became a big hit. I was not persuaded. Thanks to @AnandaramSanjay I found this counter from 2006. I agree with this.
Prof CKP preached a comforting illusion: selling to the poor makes them prosperous. This is also the economics idea “demand makes us rich”, forgetting how the supply comes to be. Demand does not make us rich, only by enabling people to be productive, we enable real consumption.
I am afraid I disagree with Prof CKP. The real Wealth at the Bottom of the Pyramid is not micromarkets to be sold to but human talent that has to be nurtured. “Satisfy demand first” approaches assume ever growing debt that fuels that demand, leading to debt traps. Produce first!
Advice to entrepreneurs: don’t look at rural areas as markets first but as production and value addition centers. We have to create value, increase incomes, only then can we sell into the market. If your business plan is to sell stuff to farmers, think what you can buy instead!
Eg. I bought canned coconut water from a vending machine in Delhi airport. It turns out imported coconut water. Coconut farmers have been hurting due to low prices in the South. Our farmers don’t take part in the higher value markets like this example and we have to enable them to.