SMEs urged to focus more on low-income consumers

SMEs urged to focus more on low-income consumers

Ngoc Hung

Curtis Peterson (L) of Tel Aviv University discusses with businesses after the seminar - PHOTO: NH

Curtis Peterson of the Pears Program for Global Innovation at Tel Aviv University in Israel gave the advice at a seminar held by the 2030 Businessmen Club under the Saigon Times Club in HCMC on March 2 to discuss startups, markets and product marketing among low-income consumers.

Peterson, the main speaker at the seminar, presented the Base of the Pyramid (BOP) model showing that 4.9 billion out of 7.3 billion people on earth earn less than US$2.5 a day.

In Vietnam, low-income earners account for a majority of the population. Therefore, this is a promising market segment for business startups in agriculture and related sectors.

According to the General Statistics Office (GSO), the average monthly income in urban areas stayed at VND3 million (US$140.5) while that in rural areas is just VND1.6 million in 2012.

Local businesses pointed out selling prices as among their major concerns when producing and supplying goods and services in rural areas.

Nguyen Khac Minh Tri, director of Mimosatek Company, said it is difficult for his company to set a price for a mineral measurement device for crops and fisheries which farmers can afford to pay.

Peterson suggested Mimosatek to offer farmers with various product packages that suit their budgets. He also advised SMEs to be creative and improve products frequently to meet the needs of low-income consumers.

Figures of the Vietnam Medium and Small Business Association, there are about 500,000 SMEs in Vietnam with combined capital of US$121 billion, accounting for 97.5% of the companies operating in the country.

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