Essay On India A Mosaic Of Diverse Cultures
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About the Author
Arundhati Roy is a prominent Indian novelist, political activist, and non-fiction writer. In addition to winning the Booker Prize for her novel The God of Small Things, she was named one of TIME’s most influential people of She lives in Delhi.
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India – A nation of diversity, culture and food!
India is a historical crossroads of many different people and cultures. Over the course of time, India has been home to the Aryans, Davidians, Moguls, Arabs, Persians, Portuguese, French and British. As a reflection of this mosaic, India is a veritable melting pot of the world's philosophies and cultures. India also has an amazing diversity of food that is prepared with almost spiritual reverence.
India – A land of diversity, culture and many world historical heritage sites.
While I never enjoy the long distance flights, one of my greatest joys of traveling abroad is "eating about it". In our most recent Retail University workshop, we had participants from all over India. In order to make them feel at home, catering prepared food from the various regions across India. I counted no less than a dozen different kinds of specialties at each lunch, not to mention several deserts!
You know you're in the land of foodies when your hotel provides a run-down of major spices such as:
Clove (Loung) Used to prepare rice & meat. Also used in baked goods.
Benefit: Controls tooth & gum infections, anti-nausea, combats colds, strengths nerves, and improves circulation.
Who knew? Sounds like cloves are perfect for the international traveler!
India – Amazing diversity of retailing models & practices
If you want to study retail, I would highly recommend India. Every kind of format and retail class of trade seems to be represented. In technology, India has large organized retailers such as Croma, Jumbo or Reliance, with stores that could compete most anywhere in the world. For consumer products, India also has a dizzying array of countless millions of small shops, some literally as small as your bathroom!
There are no aisles in India's smallest shops packed with products.
While most of these small shops lack sophistication in merchandising, they have a strategic advantage in consumer relationships. Due to the intensity of traffic, most Delhi consumers shop no more than 2 kilometers from home! Here's a country where the local Mom & Pop shop can have a competitive advantage. And at present, more than 85% of sales are made in small shops, not the big retail chain stores, or online.
Unique Characteristics of Indian Retailing:
- Only 10 to 15% of Indian consumers pay by credit card … Many don't have a credit card or trust payment by credit
- As a result, growth of ecommerce has lagged behind
- Most consumers pay in cash, even if they purchased online
- Cell phones are pervasive across India
- Rising middle class income will enable purchase of better devices
- Smartphones will be the "computer" of choice for many
"Showrooming" in India means shopping in big retail stores, checking prices online, then purchasing at small local shops
India is about to be Invaded yet again – by Big Box Retail
Over the centuries, India has been the crossroads between East and West. From the Moguls to the Brits, many have invaded, and many have stayed and been assimilated. Today the West is looking to "invade" India again with retail formats designed to tap India's rising middle class purchasing power. Indeed, Walmart recently reported millions spent on "lobbying" [the Indian Government classified it as bribes] to change laws barring entry of large foreign national retailers.
Like many other countries, India has been concerned about the impact of large foreign retailers on the local retail market. It was only last week while I was in Delhi that the India Parliament just passed laws allowing foreign retail ownership and investment.
But it's not likely that we'll be seeing Walmart or Tesco stores popping up in a few months. India's States are very diverse and independent! They each have to pass their own laws before foreign retailers can operate stores. And then there's the difficulty of finding and securing appropriate real estate in India's dense cities!
Will Big Box retail roll over the small shops in India?
In the West, Big Box retailers have had a number of competitive advantages, with have virtually eliminated small electronic shops in countries like the US and UK. Big retail chains are strategically positioned to differentiate and compete on:
- Wide assortment range – large numbers of products on hand
- "Low" prices due to large volume buying clout
- Services like tech benches to perform warranty and install
But even in the West, Big Box retailers like Best Buy are under siege. Consumers are making fewer trips to stores, and they are finding more competitive prices online. Indeed, Western Big Box retailers are reversing their heritage of large stores, and building much smaller formats that are more cost effective to operate. Review our previous post on the shift in store formats.
Potential competitive advantages of India's small shops
In India, all retailers currently buy through distributors. So the large Big Box retailers don't have the advantage of going direct. As a result of logistics, large electronics retailers are only turning their inventory 5 to 6 times annually. When you only make low single digit margins on tech devices, it is impossible to achieve a positive GMROII (Gross Margin Return on Inventory Investment) on individual tech products.
Small electronic shops can only carry a very small assortment of computers … ranging from 8 to 20 SKUs. But what they lack in range, they make up for in inventory turns and flexibility. Small electronic shops are achieving 15+ inventory turns. And the good operators can fulfill in days, and change SKUs out rapidly. If the small shop knows their consumers, they differentiate their value very effectively on:
- Consumers prefer to shop locally and pay cash
- Consumers likely know the retail shop and have a relationship where they believe they will receive service
- Small shops have lower operation costs and can be more nimble
Consumer experience will determine the winners in India
While Big Box retailers can certainly succeed in large urban markets where there is high ownership of individual transportation (cars and motorbikes). Their range of assortment can be an asset if sale people provide value and hands on experience. However, the most serious threat to Big Box store success is becoming a "showroom" for the consumer, who then buys at their local shop, who offers a relationship with someone they know and trust, within their preferred 2 kilometer shopping radius.
In Delhi, 3 lanes quickly become 7 … No wonder consumers prefer local shops overfighting through this kind of traffic to get to a Big Box store.
On the other hand, if the small shops fail to differentiate beyond just their location and price, consumers may vote for better for a Big Box environment where they can have an experience of trying out a wide range of products that are on hand for purchase.
There is little question that retail will undergo some consolidation in India. Large or small, those stores which survive will be determined by the Indian consumer voting with their cash at the place that provides the best value in personalized experience.
Speaking of an experience …
Only in India would you find an elephant merging into your traffic lane!
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- Photos: Map of India; Smarnad; woaknb.wz.sk
- Photos: Courtesy of Chris Petersen