“Well, something is better than nothing,” said the well-dressed man at the charity launch function.
“No it isn’t. You’re making the assumption that the recipients of corporate charity can’t do any better for themselves,” said I.
“But they can’t. They’re poor.”
There is a condition known as learned helplessness in which a person, through experiences beyond their control, is sensitised to the belief that they can do nothing to change their own circumstances. Women who remain in abusive relationships, children who are bullied at school, students who don’t study because they believe they’re going to fail anyway â€“ it is a form of mental shackle that restrains any ability to see a way out of the problems the sufferer is experiencing.
Sadly, it cuts both ways.
Abused women have friends who tell them that they are just awful with men, bullied children have parents who think of them as weak, and the teacher of lazy students doubts they have the ability to be taught.
Giving charity is just another way of saying, “I don’t believe you can do it either.” And so the poor give up on themselves and develop a culture of entitlement. “How do you expect me to help myself, I’m poor.” It’s an excuse everyone can use.
In India and China, two billion people don’t think of themselves as poor. They are certainly not wealthy, but they’re pursuing opportunities and growth at a rate almost unprecedented in human history.
South Africa has one of the largest rich/poor divides anywhere in the world. Two-thirds of the people in this country have only 20% of the wealth that the other third has. Companies in South Africa concentrate on that wealthy component under the impression that the poor are a market not worth pursuing.
And so the poor are left paying more for services received by the rich. Transport costs are higher, food variety is poorer and significantly more expensive. Even so the poor spend R 100 billion a year on goods â€“ surely a market worth pursuing.
And, no, it isn’t exploitation to aim products at the poor. Exploitation is when you allow intermediaries to purchase bulk quantities of your product, dilute it and repackage it in smaller quantities and then sell it on under your name at twice the price of what consumers should be paying. This regularly happens with everything from sugar, to soap. Companies that allow this surely don’t care about their reputations with the poor or about the integrity of their products.
And the end result will be that they will lose their future revenues.
The same products that are being developed in India and China for their informal markets are just as well-received in South Africa. Chinese biscuits are growing their market-share by 15% a year.
The first step for South African companies is to unlearn the idea that the poor are helpless recipients of handouts and recognise that they’re the largest and most exciting new market in the world.
Cross-posted from Whythawk.com