Why the middle of the Diamond matters
The pulling power of perception in these regions cannot be underestimated. Please note, I do not say the pulling power of brand. There is a big difference.
Anyone who has been to India, Pakistan, or just about any African country in what is called the ‘developing world’ will know that buying decisions are fundamentally different from any in the so called ‘developed world’. One only has to drive from Nairobi International Airport to the City Centre to see this. There are hundreds of people walking along the side of the highway - why? Not because they want to save the $0.25 bus fair home on that day, but they want to save the $15.00 it would cost them to travel to and from their destination to work every day.
People in these countries are choosing to spend their money differently, on things like cheap smart phones - in India, @micromax are striding ahead of competitors @samsung_mobile by producing low cost smart cell-phones that are affordable by the masses - and give a similar ‘experience’ to their highly priced counterparts... and customers are using data services too, sometimes mobile data and more often than not wi-fi.
This phenomena is, for some brands, extremely threatening. However, for service providers, it presents an opportunity. In banking for example, I have seen enormous growth in the use of mobile banking platforms, especially in countries like Kenya, where it is now ‘normal’ to use your mobile phone to pay for anything from a taxi to a cinema ticket, and where services like MPesa and MShwari are changing the way we think about money. In fact, money in the traditional sense does not exist in the way it used to in these geographies.
... And this change is unlocking massive latent potential. Having worked extensively to understand, define and deliver mechanisms that create prosperity in communities, society at large and amongst individuals it is obvious to me that the ability to trade, be it large or small trades liberates every one of us to be in control of our own destiny. One of the biggest challenges facing humanity in the future is creating a prosperous, educated society where creative entrepreneurship flourishes - intellectuals have puzzled over how to do this for decades.
Perhaps the answer is staring us in the face - technology. As we see more and more people who were previously under-privileged engaging with technology, we begin to see more and more trade - from source to customer... and banks and telecom companies have a crucial role to play in enabling this trend to flourish.
Source: McKinsey: Counting the World’s Unbanked
Through careful stewardship, a focus on technology enabling service and convenience, we will see those in the middle of societies income diamond rise ($5-$10 per day), become more creative and more prosperous... and with this comes a different kind of banking. Where customers expect a different kind of service and product suite. The numbers are mind boggling, for instance, there are over 2.5 billion unbanked citizens in the world - that is customers with no association at all with a bank. In the future, those companies who harness this potential and enable it to flourish by offering simple scalable ‘zero gravity’, customer oriented services, will prosper, and those that don’t will perish.