The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.Learn More
There is no fixed definition of the bottom of the pyramid (BOP), as it contains a mix of incomes, living standards, rural-urban locations, and varying levels of access to goods and services, including education, healthcare and organised financial services. But broadly speaking, the BOP refers to the poorest socioeconomic group in a country or society.
In the context of Africa, the BOP can be defined as comprising of households with an annual disposable income of US$2,500 or less. The income threshold of US$2,500 is in constant terms in order to take the impact of inflation into account and so make forecasts of their future purchasing power more accurate.
The three largest BOP markets in Africa, in terms of total expenditure by BOP households, are Nigeria, Kenya, and South Africa. These three countries are home to over 16 million households with an annual disposable income below US$2,500, having a combined total spending of US$41.4 billion in 2016.
By 2030, the number of BOP households in these three countries is expected to reach 20.4 million, with a total spending of US$52.0 billion (constant terms).
Beyond the number of households at the BOP and their total spending, companies need to take into account factors such as household size, number of children and households’ access to key facilities such as water and electricity. These are important determinants of consumption habits and spending patterns and can help businesses gauge consumer demand at the BOP in Africa’s key markets.