Fast moving consumer goods companies penetrating low-income markets in South Africa

Polterauer, Christoph

Fast moving consumer goods companies penetrating low-income markets in South Africa

Thesis / Dissertation

2024

Publisher

University of Cape Town

Department

Graduate School of Business (GSB)

Faculty

Faculty of Commerce

Abstract

This research explores the challenges and opportunities for Fast Moving Consumer Goods (FMCG) companies in penetrating low-income markets in South Africa, particularly focusing on the base of the pyramid (BoP). Employing qualitative, exploratory methods, the study involved in-depth interviews with industry experts to understand the strategic approaches FMCGs can adopt for successful market entry and growth. The findings reveal significant hurdles in distribution and accessibility, stemming from infrastructural deficits and diverse consumer behaviours. Nonetheless, the BoP market presents substantial opportunities for growth through innovative, culturally sensitive, and sustainable business practices. It highlights the importance of local market understanding and suggests innovative product and service solutions tailored to the unique demands of low-income consumers. The research concludes that FMCGs can achieve success in these challenging markets by employing strategies that are not only commercially viable but also socially responsible, aligning with sustainable and ethical business practices to tap into the potential of South Africa's BoP markets. This study contributes to academic and practical understanding by offering a nuanced view of the FMCG sector in BoP markets, emphasizing the necessity of a balanced approach that combines strategic penetration, sustainable growth, and continuous innovation.