Living the African Dream: How Subsistence Entrepreneurs Move to Middle-Class Consumer Markets in Developing and Emerging Countries

Abstract

The subsistence marketplaces literature has generated many insights on how the marketplaces of the poor function. One important issue that has remained understudied is how microentrepreneurs who start their career in poverty manage to break the status quo of subsistence marketplaces and obtain a stable position in the middle classes of developing and emerging countries. This article therefore investigates the business trajectories of entrepreneurs who have entered middle-class markets. The study shows that business development from lower-income to middle-class consumer markets is a stepwise process. Microentrepreneurs begin by serving relatives and acquaintances from their homes, then serve customers that they meet out on the street, and then upgrade their value propositions to target middle-class customers. Some of them further increase their businesses by entering business markets. From a strategic marketing perspective, the authors analyze the changes in resources and stakeholders that underlie the upgrades of the value propositions. The results provide implications for policy makers to create new jobs, generate tax revenues by formalizing businesses, and foster social mobility in emerging markets.

Drivers, Barriers, and Facilitators of Entrepreneurship at BoP: Review, Conceptual Framework and Research Agenda

“…Moreover, governments, in partnership with private enterprises and civil society organizations, can support the skill building of BoP producers for enhancing their productivity and wages (Karnani 2007). The public support programs providing access to individual-level financing and institutionalized internship opportunities for developing business and marketing capabilities, and public policies supporting formalization and procurement from subsistence entrepreneurs can support upward mobility of subsistence entrepreneurs (Babah Daouda, Ingenbleek, and Van Trijp 2019). Similarly, government-supported community training initiatives implemented in partnership with NGOs can enhance BoP producers’ operant resources and agency for sustained value co-creation.…”

“…These solutions designed by these knowledge entrepreneurs contribute to productivity enhancement and poverty alleviation in subsistence contexts (Pansera and Sarkar 2016; Sarkar 2018). Moreover, previous experience, along with the development of dynamic capabilities such as networking skills for establishing and managing stakeholder relations for resource accumulation along with continuous development of resource integration capabilities, play a crucial role in developing new value propositions essential for the upward mobility of subsistence entrepreneurs (Babah Daouda, Ingenbleek, and Van Trijp 2019).…”

“…It reduces the tensions experienced by subsistence entrepreneurs while adapting their livelihoods to environmental disruptions (Venugopal et al 2019) and checks reliance on counterproductive coping behaviors in response to policy-induced shocks (Viswanathan et al 2021c). It also facilitates the upward mobility of subsistence entrepreneurs and emergence of transformative subsistence entrepreneurs (Babah Daouda, Ingenbleek, and Van Trijp 2019; Sridharan et al 2014).…”

Envisioning a community‐centric approach to impact assessments in subsistence marketplaces

“…Babah Daouda et al . (2019) is a good example of research that avoids this problem by explicitly theorizing the small steps through which transformative change takes place in subsistence contexts.…”

Trust and opportunism in the competitiveness of small‐scale timber businesses based on innovation and marketing capabilities

“…An aspect of special importance in these actions is the improvement of poverty in subsistence markets, common to the poorest developing countries (Arnold, 2018; Babah Daouda et al, 2019; Toledo‐López et al, 2012; Viswanathan et al, 2014). Subsistence markets are characterized by being composed of economic agents with low levels of education, marketing and management skills, having poor or no infrastructure, by a predominance of informal contracts, and by presenting banal property rights (Arnold, 2018).…”