Friday, December 24

Rest Easy

The calendar's fourth quarter is notable for its disproportionate share of festivities; occasions when circumspect purse strings loosen, accumulating significant spends that greatly aid the cause of private domestic consumption! This is an established phenomenon in the West, building to a Christmas peak, with accepted socio-cultural-economic benefits. Not merely due to an Anglophile tilt, but India too has had Q4 turn into a Consumer Marketing delight lately, albeit with twin summits on either end. Again, of all shopping destinations, if there be one where such a dance of disposable incomes and Westernized lifestyles should be most conspicuous, Millennium City Gurgaon must possess strongest credentials!

Someone stepping into SRS Value Bazaar at Sohna Road, however, will likely make a strong case for the reverse. Rewind back a month and paucity of options in the neighbourhood, plus burgeoning household earnings, meant that grocery shopping at this establishment was a lecher's delight (of the too-close-for-comfort kind often observed in your average DTC bus). Crowded to the core with sundry shoppers and ill-trained staff, one was forced to jostle through narrow aisles and tightly packed shelves, all barely a moment away from disintegration into total chaos, to get to check-out lanes that stretched till eternity. Yet, come last week of Dec and far from an upswing in the footfall frenzy, you may well discern a pall of gloom, the droopy shoulders of salespeople a telltale of dropping revenue.

So what has changed? Almost the entire action in town seems to have moved to a new postal address: Easy Day, opened a block away. In fact, with Wal-Mart pedigree in its wings, this shop appears to have drawn an expanded clientele (with very obvious results on Sohna Road traffic, any case prone to highly frustrating jams). This shopper upsurge may partly be driven by a novelty factor, or high voltage entry-strategy advertising, but there is a suggestion of more. My hypothesis is that the underlying promise in Wal-Mart’s discounter positioning (in our notoriously price-sensitive market), and its comprehensive one-stop-shop concept. has helped pull crowds. In point of fact one must note too that discounts currently offered are minimal and shopping experience (janata express, low staff etiquette, serpentine queues et al) not significantly different from SRS. Yet, for now, Gurgaon's yuppie and not-so- population is voting through their feet (and wallets) there!

The likes of Easy Day may have a larger destiny to fulfill though. In the last few posts we have agonized over a lasting fix for India's Food Security. Yet, despite an immediate inflation crisis and very obvious medium-long term supply inadequacy, our current governmental response is random at best (unless of course one believes conspiracy theorists that see a deliberate, nefarious design in repeated policy and administration failures). In any case, the Government's assertions of control are rendered meaningless by WPI (and more so, retail inflation) figures with sorry regularity. Thus, in mourning what ails Indian Agriculture, it is time to shift focus away from reactive tweaks that is the wont of democratic governments, or hope for one-size-fit-all solutions. Instead, we need to tackle the supply chain in bite-size-chunks. The most conspicuous opportunity seems in storage and distribution: we waste a shameful 20% (likely more) of the food we produce, an abysmal situation by any account (Animal Farm). Granted that our sarkari agencies are not up to the ask of delivering badly-needed supply chain upgrades, the logical option for investment and knowhow (say, cold storage infrastructure) is FDI in retail. Hence the pitch for Easy Day and its kin – the benefits delivered via their backward integration efforts.

This is not an easy cat to bell. We cannot wish away the fears, imagined or otherwise, of thousands of mom-&-pop kirana stores getting overrun. On the contrary, we ought to take a leaf from China’s book on extracting a pound of flesh when framing policies. Let organized retail serve a purpose, with policymakers, producers and customers, all aligned to ensure the best deal. And in time, hopefully, technology shall deliver us irrigation and yield increases; productivity improvements that cannot fructify in one easy day.


Rakesh:live-to-learn said...

good read.

will review your other blog posts during the week and would revert with my comments...but knowing you, am sure it would not surprise me at all.

keep it up!

Anonymous said...

Wal-Mart to solve the issue of Dal-Bhat -- interesting how you sneak in one for the free market even amidst the raging debate on the new model :)

There was this that I picked up the other day as to how WM's fortunes swung up in the downturn -- recession's lessons if you please -- did you catch it too?

Waise try reconstructing this with Machher Jhol for Daal and you would have one castaway-Calcutta denizen's vote for the taking!