Marketing Interactions in Subsistence Marketplaces: A Bottom-Up Approach to Designing Public Policy

TLDR

Informal markets dominate buyer–seller exchanges among the poor in many developing countries. The study investigates an informal subsistence marketplace in South India. The authors interviewed consumers and microenterprise owners, uncovering seven themes that describe the marketplace context, interactions, and exchange elements. They argue that policies should empower subsistence entrepreneurs and consumers, support emergent solutions, bridge informal and formal economies, and adopt a bottom‑up approach, thereby enabling informal microenterprises to drive economic growth.

Abstract

In many developing countries, buyer–seller exchange among the poor occurs mainly in unique, socially embedded environments that are essentially informal markets. This article describes the findings of an in-depth, in situ study of an informal-economy subsistence marketplace in South India. Through interviews with consumers and owners of survivalist microenterprises, the authors identify seven themes that characterize the subsistence marketplace context, buyer–seller interactions within them, and specific elements of exchange. Drawing on these findings, along with theories of social capital and consumption in poverty, they make the case that business policy in developing countries should aim to empower subsistence entrepreneurs and consumers, embrace emergent solutions, help build bridges between informal and formal economies, and adopt a bottom-up orientation to policy development. The study's findings offer important insights into policy that can help microenterprises of the informal economy become engines of economic growth in these countries.