Let’s talk about building products for the billions of people around the world in developing markets and underserved communities. Too often, the tech industry focuses narrowly on creating products and services for the relatively small segment of the global population that is wealthy and living in major cities in North America, Europe, and parts of Asia. However, there is a vast unmet need and opportunity to develop innovative solutions that can improve lives and unlock human potential in emerging markets from Africa to Southeast Asia, and Latin America to rural communities everywhere.
By 2030, projections show 85% of the next billion members of the global middle class will be in Asia, with hundreds of millions more in Africa and Latin America.
The challenge of building products for developing markets and underserved populations is multifaceted. Many are living in poverty with extremely low incomes and limited access to infrastructure like reliable electricity, internet, transportation, and banking services we take for granted in the developed world. There are language and literacy barriers, with hundreds of local dialects and languages. Cultural norms, traditions, and belief systems can vary radically from one community to the next. Regulatory environments and government instability add uncertainty and risk. The lack of widespread digital services and adoption leaves many still deeply rooted in cash-based informal economies.
Yet these are also markets of great opportunity – both for the potential positive impact on billions of lives, and for companies wise enough to find innovative business models to serve them. The rising global middle class is being driven by rapid growth in Asia, Latin America, and Africa. By 2030, projections show 85% of the next billion members of the global middle class will be in Asia, with hundreds of millions more in Africa and Latin America. With rising incomes and aspirations, these populations represent a massive need for new products and services – from financial services to healthcare, education, utilities, consumer goods, and beyond.
Serving these markets requires a very different product development approach than we typically see in Silicon Valley and other major tech hubs. Here are some key principles and mindsets for building successful products for emerging and underserved markets:
Affordability and Access Over Premium Pricing
For most major tech products and services aimed at developed markets, the monetization strategy relies on premium pricing tiers and upsells. The assumption is customers have high disposable incomes to pay for convenience and delightful experiences. In emerging markets, the name of the game is affordability and wide-scale accessibility. Products must be tailored and priced for very low-income customers, often living on just a few dollars per day. This requires rethinking business models, pricing, and packaging to make products as affordable and accessible as possible while still being sustainable businesses.
Creative Payment and Distribution Models
With low rates of bank accounts, debit/credit card adoption, and modern payment infrastructure, new creative approaches are needed. Payment models optimized for making frequent micro-payments in cash at local retail outlets or via mobile money platforms. Partnering with local stores and merchants to sell and distribute products and services. Partnering with NGOs and community organizations to build awareness, education, and adoption. Every aspect of the product experience must be tailored for these nontraditional channels and behaviors.
Focus On Fundamental Needs Over “Delights”
Design thinking in developed markets puts a premium on crafting “delightful” product experiences that go far beyond just core utility. But for low-income customers struggling with very basic needs, that’s a luxury they can’t afford. The imperative is ruthlessly prioritizing fundamental core values, trimming away anything extraneous or non-essential. Every ounce of development effort must be concentrated on establishing clear value for money against key needs.
Extreme Optimization for Cost Barriers
Beyond pricing products affordably, every technical decision from data usage to memory footprint to application size has an outsized impact on costs and accessibility for customers. Thoughtful optimization of these factors to minimize usage costs and ensure the product will work on extremely low-bandwidth networks and older, lower-cost hardware devices in the field. Things like offline operation and frugal data/memory usage that might be “nice to haves” in other contexts become essential requirements.
Go Local
Effective solutions can rarely be developed from afar by an HQ in New York or San Francisco. They require spending extensive time immersed in local cultures and communities, gaining deep first-hand insights into real behaviors, mental models, and means of living. It means partnering with local entrepreneurs, developers, and organizations who innately understand contexts, languages, and cultural nuances that outsiders cannot. It means rethinking product design and marketing on a community level, not a “mass market” level.
Embrace a Business Need, Not Just Social Good
Businesses need more than charities and subsidies to thrive or sustain. Finding a real measurable commercial opportunity aligned with the social benefit is crucial for long-term viability and impact. That could be reaching massive economies of scale by aggregating countless low-income customers. It could be tapping into a remittance economy or serving as a platform for other businesses by digitizing informal economies. The best efforts find economics that make the business self-sustaining in service of the social mission.
Lead With Empathy and Humility
More than anything, success requires immense reserves of empathy, humility, patience, and a willingness to profoundly rethink assumptions baked into our products and business practices. Too many fail by trying to naively retrofit or redline solutions built for the developed world into these drastically different contexts. Leading with authentic humility to truly understand unique lived experiences, cultures, and needs is paramount.
Subscribe and never miss a post!
Building Products for Developing Markets and Underserved Communities – The Bottom Line
The bottom line is that innovating for emerging and underserved markets represents an immense business opportunity and human imperative that the tech industry cannot afford to ignore. It will require bold leaders and companies to embrace a fundamentally different set of mindsets, approaches, and business models. But the payoff of responsibly improving the lives of billions while creating sustainable, high-impact businesses is unquestionably one of the great challenges and opportunities of our era.
Leave a Reply