So now our metros are definitely getting overcrowded with new retail formats. If all of India has a 3-4% organized retail percentage figure – in metros, its probably close to 30-40% (or more).
Grocery, Apparel, Books & Music, now even Medicines, are now all seeing huge sales via the spanking new “stores” (they used to be called “shops” when they were mom and pop – now you can’t call them anything but “stores” J ). But I think the phenomenon that has overwhelmed us Indians is the ‘mallification’ of our metros.
In the beginning, it was hugely exciting – I think the average metro citizen found his/ her ideal ‘hang-out’ joint – these were nice Air-Conditioned places, with escalators to take free rides on, bright showrooms – where you didn’t need to buy anything – you could just ogle, entertainment centers – where you could play a few video games, good and not-too-expensive selection of food in the food courts, clean loos (aah, what a relief!) and, best of all, some or the other promotional event with a lot of audience participation going on all the while. Most malls also offer a multiplex/ cinema theatre – so, footfalls get increased manifold
In fact, when Crossroads, one of the very first malls in Mumbai, India; was opened, the crowds became so unmanageable that they had to restrict entry --- only people with cell phones (in those days, mobile penetration was much lower than it is now) were allowed in!
I actually love these malls – I like to window shop as much as the next person, I think the lesser crowded malls make for nice weekend jaunts for the kids where you combine your necessity shopping with fun and food.
However, I was reminded of simpler/ older times the other day when I – after a long time – visited my neighborhood market. I first saw a wagon-cart vendor of bangles and hairclips – and my two daughters pretty much cleaned her out of all finery (all at a price that I would have paid for ONE pair of bangles at the malls). I then picked up two dresses for them - for the ridiculous price of 40/- (1 USD) each – that, incidentally, is less than the price I would pay at the parking lot of the malls – I bought vegetables that actually SMELT of fresh earth (hmmmm….I had forgotten that such a smell exists!) – I bought some plastic pots and pans – again, 5 for the price of one….made the lives of many vendors that evening that much happier, and came home with 3 bags full of goodies……
On thinking back, I realized that mallification was all right in its own place, but the bulk of the Indian consumer actually shops at moms and pops – and very happily/ cheaply too! Makes you think, doesn’t it?
Monday, October 15, 2007
The Indian Retail Scenario – The Charm of Novelty battles it out with the Charm of Simplicity
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While on Retailing, I think the Online grocery retailers in the U.S. are really entering exciting times - specially thanks to the entry of Tesco's Fresh and Easy, and also Amazon's Fresh. Amazon, specially, apparently has this cool "pre dawn delivery" that lets you have your order - freshly and neatly packed - waiting at your doorstep before 6 am if ordered till the previous night. Fantatstic!
Well, this is the same market where Webvan died an untimely death - lets see how it all pans out - maybe the time is "ripe" now!
Location - The Winner anytime.
So we learnt in retail management lessons - its all about location, location, location - i would completely agree!
We shop at a fab-mall, even though we think the nilgiris or spencers merchandize is better, simply because fab-mall is on the same side of the road as home (i can pick up grocery on my way home from office)
We no longer eat "good" chinese food - simply because we have a chinese restaurant (it's really terrible!) close to home - and its just so much simpler to order from there
For all celebrations in office, we now gift people Sapna Book House coupons - why?? - Youv'e guessed it! Because its literally across the road, and not only can our office administration staff pick up the coupons themselves, people can just go there to redeem these gift coupons!
Its obviously the 'convenience' angle --- its the backbone of the 'convenience' stores - thats why a Duane Reed is so popular in New York (New York doesnt even have a Wal-Mart!)
In fact, this is what makes for great strategy by "me-too" retailers - so you always see a Cafe Coffee Day and a Barista vitually next door to each other...very often a McDonald's and a Burger King virtually next to each other, a Spencer's and a Nilgiris virtually next door to each other...these outlets do NOT want to give away the location advantage to their competitor...
Location --- Location --- Location!
Organized Retail - The Feel Good Factor
Organized retail is still a relatively new phenomenon in India. For every spanking new mall and retail store there are dozens of small unorganized neighborhood stores, in many cases standing shoulder to shoulder as if to drive home the fact that India is really changing with the passage of time! While for the younger generation of Indians, it is most normal to see organized retail, for people like me who straddle the old and the new eras, it seems almost unbelievable at times that such retail stores now are mushrooming in the most unlikely places in our cities and neighborhoods.
To the middle class Indian, a mall is now a feel good place to go to. It is buzzing with life, full of the in-things on display, a feast for the senses. But for basic necessities, most of us prefer our neighborhood small shops where prices are, in most cases, usually several times less than in organized retail outlets. The average Indian is very price conscious and in many cases will not spend more money for the same thing that is available for less elsewhere. The middle-class Indian like me also enjoys the whole shopping experience at the small mom and pop stores. It is a whole sequence of exciting events starting with the customer telling the shopkeeper what she wants; then the shop-keeper pulling out and showing his wares (depending on his mood, the time of the day, and many other eclectic factors, he may or may not choose to display his entire inventory in the product category that you are looking for); then the customer pointing at and asking to see items which are behind the counter – which by the way, is almost a sacred wall which the customer cannot go behind and is the sole territory of the shopkeeper alone! From there he rules his fiefdom and wields unfettered authority and decides whether to show or not to show/how much to show or not to show of whatever it is that you want to buy. All of this culminates in a good, hard, and sometimes long bargaining session where both parties try to beat each other at negotiating the best monetary deal for himself/herself. Finally the transaction either happens because one party concedes to the other and the customer buys the product or the customer walks away only to repeat the entire rigmarole at another shop; or the shopkeeper calls the disappointed customer back while he is walking away and they compromise on a deal. Whew!!
Recently I had a shopping experience that jiggled my memories of the good old times when we did not have organized retail at all. My son told me fairly late one evening that he was supposed to wear ethnic clothes to school the next morning for some special assembly. I immediately went into a tizzy as he had outgrown all his ethnic outfits and it was too late to make a trip to the nearest mall. My husband suggested that we check out some little garment stores that lined the road in the village close to the place where we live, since any other place we would try to go to would shut down before we reached. Since we had no other option, I reluctantly went, feeling pretty sure that we would not find anything. I was pleasantly surprised when the shop-keeper promptly pulled out three outfits which looked quite nice, as soon as I asked him. I could not believe my ears when he told me the price was Rs 130 and I asked him to repeat it just to make sure that I had not misheard anything - the same thing would have surely cost me at least 4 times more at the mall! I promptly pulled out some money and held it out to the man while he looked at me strangely, as if expecting me to say something, while hesitantly reaching out a hand to take the money. I realized that I was breaking the protocol and hence was confounding the man. What he was expecting was a typical episode of bargaining from me - a natural part of closing a business transaction in most of the traditional retail stores. He was almost a little disappointed that I had not tried to reduce the price by a few rupees, as we Indians traditionally have been doing down the ages with all our shopkeepers. I felt a little bad to disappoint the man. So I weakly asked him if I could pay him Rs 120 instead, all the while fervently hoping that he would say no, since I did not want to deprive the poor man of another few rupees from his already very small profit margin. However, this got the man very excited, there was a gleam in his eyes. He refused to give me the discount and babbled on about how his rates were the most reasonable. He looked expectantly at me for a counter argument but when he saw none coming from me, he handed me my change back and we parted ways - me as a very satisfied customer and he perhaps as a not so very satisfied shopkeeper as he had not got the best of a good bargaining session!
Although we are seeing an onslaught of organized retail in India now, I think our traditional retail format (or rather the lack of it) is far from going away any time soon. Like everything else in India, both the traditional and the organized retail will co-exist harmoniously. This is because of three reasons – 1) most Indians like me, do NOT want traditional retail to go away; 2) many Indians cannot afford to/are not willing to pay higher prices for goods just because of the convenience and the superior shopping experience that organized retail provides; and finally, 3) traditional retail provides livelihood to many Indians and this section of the population will not allow their means of livelihood to be taken away from them (as witnessed in the uproar against the Reliance chain of stores in UP).
What organized retail is providing to every Indian from all strata of society is an opportunity to experience a world that was never before accessible to them. I remember the first time I went to the US many years back and went to a mall – I was awestruck by everything that I saw – a completely new and magical world where no one stopped me from touching, feeling, smelling new, beautiful, unique, expensive items that I would never have been able to go close to at home. I was never sure of what was real and what was fake; I was very scared to touch or step on anything for fear of being reprimanded by the sales people! In short I was awed, scared, excited, stressed, curious – all in one! I see the same look of awe, fear, excitement, anticipation, curiosity in the faces of some of the people who now visit the malls in India. For some people, coming from distant places – it’s almost like a pilgrimage. They experience the dazzle and shine of a world which is otherwise inaccessible to them. So what if they cannot afford to buy anything from these stores – they can at least see them and feel good!
On retailing, I had this extremely unusual experience at one of the new "malls" that have opened up in recent times, which clearly illustrates India's infancy in this vertical.
After spending around 30 minutes on choosing an expensive perfume, the checkout counter could not bill it to me as they had the SKU number wrongly mentioned on their database.
It was so unfortunate that they could not service a customer who was waiting to pay for their wares.
This is exactly why players like Wal-Mart take so much time to enter a new market.....get their homework and infrastructure in place.
I did not buy that perfume from that retailer and picked it up somewhere else.
Funny, isn't it?
While I was as awed as anyone else when malls first made their appearance in Bangalore, it took me quite a while to summon up "guts" to walk into one - avoiding the disappointment of not being able to afford something I might like there - but now I enjoy window shopping.
I love browsing at any of the malls or organized home retailers but I always buy my groceries at the local grocer - not the location advantage but the advantage of know ing the grocer for the past 25 years and the inevitable discount i get off the MRP price for almost all the stuff I buy. I dont need to wait at the check out counter and invariably the grocer's boys arrange an auto for me and load my stuff. I think this is where the unorganized retailers win out...the personalized touch.
Personally, I'll take the hustle and bustle of Delhi Central Market and Delhi Haat over the glitzy malls every time I visit India. For NRI's such as myself who left the homeland (yeah...even after acquiring my U.S. citiziship years ago, India still remains homeland)for U.S. shores many moons ago, we carry in us the sights/sounds/images of what quintessentially is India in our hearts.
I have my fills and thrills of "malling" here in NJ all year round. But, when it comes to shopping in India, I'll take Chorbazaar over Shoppers Stop in a heartbeat. Its a womans prerogative to haggle, and with the $$ hitting an all time low now, I'm sure the challenges on getting the best bargains outside of malls will hit a high ground in my next visit.
I would rather chat with the local vendor who listens with glee about an Udupi or a Saree Emporium on Oak Tree Road in Edison, NJ, than fill out a proprietery form with name, email and contact information for a store I am shopping within the mall enclosures.
Essentially, I am a people person and being in touch with the common junta is so much more fulfilling than sipping the complimentary Coke/Pepsi in an air-conditioned store where you are treated with an unnatural and unsettling reverance reserved for NRI's.
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