India’s growth story is astounding, and has spread into the interior at a rapid pace. Current estimates put the rural market collectively at $425B USD in 2010-2011 (CII-Technopak, November 2009). This estimate doubles the 2004-05 market size of $220 USD. These are collective figures.
% Growth in 2006 over 5 years: National Readership Studies Council (NRS)
Color TV: rural = 235%, semi urban = 91%
Motorcycle rural = 113%, semi urban = 90%
Refrigerator: rural = 52%, semi urban = 20%
Air cooler: rural = 86%, semi urban =29%
The energy market is additionally astounding:
- US $75 on goods and services per month (known as ‘Base of the Pyramid.’) About 40 percent of India’s rural households do not have access to electricity, and more than 85 percent must depend on “dirty” kerosene for lighting and firewood for cooking.
- Estimates vary, but about 500m poor entrepreneurs need access to finance; while only just over 150m have access (Source: State of the Microcredit Summit Campaign Report 2009)
- Less than 500k clients of MFIs have access to energy loans (Source: Using Microfinance to Expand Access to Energy Services, 2007)
- 1.7 billion people globally have no access to electricity and 2.4 billion people rely on traditional biomass for cooking and heating, producing millions of tons of CO2 (Source: The Next 4 Billion, 2008)
- 1.5 million people globally die of indoor air pollution each year (smoke from biomass) (Source: http://www.indiaenvironmentportal.org.in/node/40276)
Source: The Next 4 Billion - Market Size and Business Strategy at the Base of the Pyramid; IFC and World Resources Institute, March 2008. And Arc Finance.
- In India, this gap in the BOP sector is estimated at 114 million households in rural and peri-urban areas, constituting $2.11 billion market for clean energy products and services
Market Sizing Social Enterprise Durables
A recent study conducted by the Center for Development Finance (CDF) at the Institute for Microfinance Research (IFMR) examined the market size of the social durable market for solar lights and fuel-efficient stoves. The purpose of the study was to develop a more comprehensive understanding of the market. CDF’s initial finding suggest a more conservative estimation for the solar light and fuel-efficient stove market than other previous studies.
- The present solar lantern market is estimated to be around $18.5Milion USD (annually, nationally).
- The fuel-efficient stove market, $24Million USD (annually, nationally).
These numbers were based on the following equation:
(Price of least expensive product available in the market) (Number of Households) (Adoption rate) / (Average product lifespan)
Previous market sizing estimates may be larger due to errors / differences in calculating and methodology such as ignoring the adoption rate and product longevity variables. Additionally, as adoption rates increase due to lower product cost, customer education, and consumer financing options, the market will naturally become more mature.