World's poor emerging as newest market

TOKYO, Sep 27, 2009 (The Yomiuri Shimbun - McClatchy-Tribune News Service via COMTEX) -- UL | Quote | Chart | News | PowerRating -- An increasing number of Japanese companies have begun to target the world's poorest socioeconomic group, aiming to eradicate poverty and improve sanitary conditions in developing countries _ and reap a profit.

The size of the market, currently led by Unilever PLC and other U.S. and European companies, is said to be worth about $5 trillion, or 450 trillion yen, annually.

Observers point out the business field is expected to create a new market for Japanese companies and push the development of new products.

Sumitomo Chemical Co. began manufacturing and selling mosquito nets to prevent malaria infections in Tanzania in 2003. It has produced about 19 million nets at a price of $5 (about 450 yen) each. The net is woven with threads infused with special insecticides. Currently, about 4,000 people work at two factories in the country. The company plans to open another facility in December and employ 2,000 new workers there.

"It's not charity. It's business," said Tatsuo Mizuno, who is in charge of the project at Sumitomo Chemical.

Yamaha Motor Co. started trial sales of water purifiers that convert dirty river water into safe and clean water for people in rural villages of five Southeast Asian countries in 2000.

Venture firms called "social entrepreneurs" also are engaging in the same field.

Microfinance International Corp., set up by former Bank of Tokyo Mitsubishi employee Atsumasa Tochisako in the United States, provides financial services such as remittances to customers' home countries and accommodation of loans.

Hasuna Co., based in Shibuya Ward, Tokyo, imports accessories made by the poorest people in Central America and Africa to help them become financially independent.

In August, the Economy, Trade and Industry Ministry set up a study team of intellectuals and businesspeople to coordinate cooperative research efforts among private companies and international organizations, and implement the resulting ideas into real projects.

Behind Japanese companies' increasing interest in projects targeting the world's poor is a sense of heightened corporate social responsibility. Furthermore, they aim to make inroads into the markets of developing countries as those in developed countries dwindle.

The Japanese firms are expected to utilize the methods obtained through this business model for products sold in developed countries. People in developing countries generally prefer products that are easy to use and repair. The companies are expected to propose the newer, simpler values of such products to Japanese consumers who are used to products with multiple functions.

"To overcome a shortage of information, it's essential that these companies cooperate with nongovernmental organizations, international organizations and local companies," said Tokutaro Hiramoto of Nomura Research Institute, Ltd.

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