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X-ray of the Base of the Pyramid in Mexico

What does this majority sector of the population consume and spend, and where do revenues flow?

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Published by ConnectAmericas

Companies, entrepreneurs and investors seeking to set foot in Mexico should pay special attention to this group of individuals that today represents more than 75% of the Mexican population. Their aspirations, needs, education and behavior impact their form of consumption. 

The Inter-American Development Bank (IDB) prepared a document detailing the social, demographic, educational, and consumption characteristics called “The base of the pyramid in Mexico.”

Below we share some of the underlying features of the base of the pyramid in Mexico: 

  • Market: 90 million people earn up to US$10 per-capita per day and comprise a total market of US$ 170 billion per year.
  • Spending: 30% of total spending goes to food, 24% to housing, followed by transportation, education and clothing, in a smaller proportion.  
  • Homes: Families typically consist of 4 members; the head of the household is on average 43 years old and has 8 years of study. 61% own a house. 
  • Services: 98% of households at the base of the pyramid have access to electricity, 95% to drinking water, 48% to gas, 23% to fixed telephony, 19% to Internet, 17% to pay TV,  17% to LCD, LED or Smart TV and 21% to computers, laptops and tablets. 
  • Income: 58% of Mexican heads of household live on a weekly or daily flow of income and adapt consumption to this rhythm. In other words, the base of the pyramid is used to making small payments instead of letting monthly fees add up. 
  • Internet and phone sector: Only 23% of heads of household use Internet, and 41% state that they do not know how to use the cell phone or computer. Out of the 40% that connect to the Internet do so from internet cafés or by means of weekly payments. 82% report having at least one cell phone for family use, of which 78% are recharged without Internet or cellular data services. Internet penetration is higher among those between 18 and 35 years of age. 

Access the complete document to learn more about the details. The IDB Opportunities for the Majority Sector (OMJ) promotes and finances market solutions and business models that are commercially viable for the base of the pyramid in Latin America and the Caribbean.  Since 2007 OMJ is funding small, medium and large enterprises, financial institutions and investment funds that promote the development and expansion of business models that meet the needs of the markets at the base of the pyramid. Join this community on ConnectAmericas.

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