The second step towards understanding the market is to meet, listen and talk to people at the BoP.
Reciprocity’s Learning Journeys are designed to expose corporate executives and managers to the BoP, through direct immersion: Meeting with single mothers living in shacks, with families living in state-subsidized housing, with members of the emerging middle classes, with small business owners in the street…
Such interaction is essential to gain a better understanding of the diversity and complexity of profiles in lower income segments.
The Learning Journeys are part of an innovation process in which Reciprocity helps you unfold the complexity of the BoP market, and identify opportunities and potential partnerships.
The natural next step following the introductory process is to dig deeper by investigating and supporting intuitions with qualitative and quantitative data.
- Anglo American: Enterprise development at the BoP
- Schneider Electric: Access to energy
- Total Coal: Enterprise development
- University of Cape Town: Emerging Enterprise Consulting
- Insurance companies
Anglo LogoAnglo American is to South Africa what General Motors and Ford used to be for the United States: A corporate giant that played a huge role in the country’s economic development over the past 100 years. It is now a truly global corporation with operations all over the world and is actively engaged in fostering enterprise development at the BoP in all the communities it works in.
Every year, Reciprocity takes a delegation of Anglo executives from Brazil, South Africa, Mali, Namibia, Australia, Europe and elsewhere to Nyanga, Khayelitsha and Philippi in Cape Town in order to catch a glance of Cape Town’s rich and diverse BoP economic landscape: Looking at transport nodes, meeting with informal and formal traders, with service providers, studying local innovative models such as sewing cooperatives… and getting inspiration for enterprise development and empowerment projects in South Africa, Brazil, Mali and other countries of operation.
Reciprocity took Schneider Electric on a “deep dive” into the energy market for low-income households in the Cape Town townships. The aim of the Learning Journey was to meet a variety of stakeholders shaping the market at the lower income end, including:
· End-Consumers / Prepaid users: Households living in informal as well as formal dwellings, some of them clients of Housing Microfinance Institutions, gaining an understanding of the issues surrounding access, affordability, usage patterns of electricity (electrical devices), and life at home.
· Secondary traders: They are end-consumers legally connected to the grid, but who trade in electricity by selling on to their neighbours, at a profit, often through illegal connections;
· Retailers: The ubiquitous spaza shop owners, who sell prepaid electricity vouchers;
· Electricians: Whether they are official or clandestine, they work to provide access by connecting low-income households to the grid.
Total Coal is one of the biggest employers in Mpumalanga province and is actively engaged in a local economic development (LED) plan in Govan Mbeki district where it is based.
Total Coal asked Reciprocity to take two of its executives on a learning journey focusing on the business fabric of Nyanga, Gughulethu and Khayelitsha, looking at “Enterprise Development” business models in the telecom industry (access to voice and datas), the finance industry (access to loan and retail banking) and the retail (informal spaza shops) catering specifically for the low income market. This journey provided delegates with concrete, replicable examples from which to draw inspiration applicable to Total Coal’s “Enterprise Development” strategy.
Aimed mainly at MBA students, EEC missions consist of ﬁeld work for exchange students in the informal and formal entrepreneurial tissue at the BoP. Students are assigned in small teams to an entrepreneur from the townships, with the aim of improving his or her prospects. These consulting missions can last between 1 to 6 weeks, depending on the type of formula chosen by the academic institution. Alternative types of ﬁeld exposure for students and academics may involve speciﬁc consulting missions on behalf of corporate partners of academic institutions, aimed at studying existing efforts by these corporates to reach BoP markets: distribution models, micro-franchises, procurement…
When it comes to understanding BoP economics, it is difﬁcult to beat the hands-on experience and lessons learnt from working with a micro-entrepreneur from the BoP. In many ways, the actual teacher here is the micro-entrepreneur. The learnings gained through such an experience are immense, for students as well as for MNCs trading or interested in trading at the BoP.
Through the University of Cape Town, we offer the EEC programme to international MBA students from Columbia, Cornell, UNC Kenan-flager, Duke, Kellogg University… and several others
Access the EEC Website and meet with the entrepreneurs.
The purpose of our Learning Journeys on insurance are to investigate the insurance needs in low-income communities, using Alexandra township in Johannesburg as a benchmark.
Split into groups of 6-7, our delegates, drawn from leading insurance companies from all over Africa, interacted with ordinary household members in shacks, RDP houses, council houses as well as with small business owners in order understand the insurance market at the BoP and its challenges, as well as to discuss, identify and visualize market opportunities for the development of micro-insurance products.