Selling to the Poor
Foreign Policy: “When a retail chain in Mexico started selling chicken parts instead of whole chickens in its outlets a few years ago, sales quadrupled. Smaller unit packages—enough for a single, immediate use—enable poor consumers to buy a product that they otherwise could not afford, thus unlocking their purchasing power. The same principle applies to personal-care products. In India, Hindustan Lever, Procter & Gamble, and most of their competitors make ’single-serving’ versions of their products, from detergents to shampoo. More than 60 percent of the value of the shampoo market and 95 percent of all shampoo units sold in India are now single-serve. Many are designed explicitly for the poor and do not even require hot water. Because of these efforts, nearly all Indians now enjoy access to shampoo. Companies selling small unit sizes at affordable prices make money, expand markets, and generate broader access to goods and services that improve people’s quality of life.”
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