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The day after their arrival they hit the shopping districts. The young lady's first impression is not encouraging. She came looking for gleaming shops, huge displays and neon lights -- this is what she thought wedding shopping is all about. Instead she finds a collection of Mom and Pop shops in a heavily congested area with a massive parking problem. In addition, there are no washrooms clean enough to accommodate her. There is plenty of merchandize, but it's hard to choose the right store. Prices vary from place to place, with storeowners pricing the same quality and brand of product differently.
There are no brand names or guarantees; a sweet-talking salesman could easily take her money and deliver her sub-standard merchandize. Lucky for her, her relatives in the city manage to prevent her from making wrong choices. She marvels at her parents for their endless haggling before concluding each deal.
Next comes the food experience. The food looks delicious but the seating is miserable. She looks at her parents and questions them about the high hopes they had built up in her, back in New York, or London or Chicago.
In the end, she finds everything she likes -- dresses, saris, blouses and other wedding paraphernalia, but the experience leaves her aghast. As a software engineer, she knows very well that India has made tremendous progress in the last ten years, but she wonders why there are no decent places to shop. Her Indian cousins, attempting to cool her anger, tell her that only a select few cities have shopping centers. Most people cannot afford to go there, or to pay the exorbitant prices the storeowners charge under the cloak of high rents. Alas! She thinks India had better speed up the building of modern shopping districts and upgrade existing ones. With this experience she returns home, a bit perplexed and a bit amused.
Welcome to the shopping experience in India. The above description is not an isolated experience -- countless young ladies will tell you the same story. It is essential that we do something. There is one way to do that -- learn from the West.
For ages retailing in India has been a Mom and Pop business. In an $800-billion economy, retailing is a $300-billion business. Less than 4 to 5 percent of this is in the organized sector, where the customer is king, where prices are standardized, where common business and customer service practices are enforced, where quality control and guarantees are standard. Mom and Pop stores can simply not provide such practices.
One would wonder why retailing, an aspect of everyday life in India that employs more than 22 million people, has not been organized for so long. Somehow Indian consumers have grown used to this hotchpotch attitude. They do not seem to mind the roadside stand mentality of otherwise very prosperous retail storeowners. About 100 stores in New Delhi's fashion district in South Extension sell dresses and jewelry to an average of 20,000 brides-to-be in a day during the wedding season. Every bride, rich or poor, makes it a point to visit this fashion district before getting married.
The situation in Chandni Chowk (Emperor Shah Jahan's shopping area) is no different. It is a huge shopping district with thousands and thousands of stores, cramped together in a small area no more than two miles long. They sell everything from horse droppings to the finest diamonds. Customers and owners are all milling around, looking for space to stand and conduct their business. Since space is tight, streets and houses that crisscross the main thoroughfare have been converted into places of business, presenting an untidy appearance.
Is the situation any different in Mumbai or Kolkota or Chennai? It's unlikely, given our indifference to ideas that are new and foreign. For generations Indians have been shopping in this way. Ideas are available, but they are foreign. Politically these are hot potatoes, because a better or smarter idea may hurt one or other business interest. New ideas may cause little Mom and Pop stores, which are very successful with their monopoly marketing, to lose their coveted positions. They have built up political muscle and are pushing in favor of continuing the roadside "kirana" stores policy. They do not favor air-conditioned shopping centers, clean, with all amenities.
Hence, India's drive to open up to new ideas and revolutionize the retail sector is held up. Retailing has potential to double from the current $300 billion a year to about $650 billion a year in half a dozen years. This will only happen when politicians have had a go at it.
Consumers in India, like their counterparts elsewhere, mostly pay the going price in cash for all their purchases. Credit cards are not frequently used. Hence, consumers have to stuff pockets or bags with money prior to outings for groceries or clothing or stationery or any other everyday item. This is good from the stores' point of view, as they deal with cash only. Also, it limits consumers' spending power to the cash at hand. They cannot go far beyond their immediate neighborhood to shop; otherwise the cost of carting goods back home becomes heavy. Slightly affluent consumers use motorized transport.
Distant trips for specialized shopping are rare. Hence every neighborhood has its own stores, selling almost everything. A consumer has to visit store after store to complete necessary purchases. Since most of these stores are open strip plazas, inclement weather usually restricts movement. Consumers return when the weather clears, so store sales are unaffected by day-to-day weather. The storeowners therefore feel no necessity to improve.
This state of affairs stacks everything against the consumer. First, one has limited choices. Second, one must pay the going prices in that neighborhood. Lack of competition does not help. Third, the storeowner has no incentive to improve his store or display or customer service. Fourth, with abundance of labor, the storeowner can exploit the employees with long hours and low wages. None of the forgoing helps the consumer's cause. The choice is to take it or leave it.
Do Indian consumers have any rights -- to expect better service, better products or better prices? Under the prevailing circumstances, I would say no. Consumers deserve better. They need a standard price structure no matter where a product is bought (except for local taxes), they need competition-driven store displays where similar stores compete, they need a well-trained customer service, where incoming customers are serviced with courtesy. They also need a fairly refined refund or return policy where unsatisfactory merchandise can be returned within a reasonable timeframe for refund.
The Indian retail revolution has a long way to go before it comes of age.
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(Hari Sud is a retired vice president of C-I-L Inc., a former investment strategies analyst and international relations manager. A graduate of Punjab University and the University of Missouri, he has lived in Canada for the past 34 years. ©Copyright Hari Sud.)
