The World’s Largest Retail Establishment: India.

When I was taking the bus from the Thai border to Siem Reap in Cambodia, I was talking with a young British fellow who had just come from spending five months in India. When I asked him his favorite part about the country, he told me that it was the amazing room service. “The whole country has room service. You walk down the street and want a beer, you just say loudly and clearly, ‘I would love a cold Kingfisher right now’ and BAM! Three minutes later, someone will walk up to you with a beer. They’ll ask for an extra 20 rupees, but you get your beer.” I don’t know if this actually works, but if it works anywhere, this would be the country. It seems like everyone here sells something, and if they aren’t selling something, they will gladly direct you to someone who’s got what you need for a cut off the top.

Selling is serious business. Retail is how a large part of India’s population makes a living. India has more retail establishments per person than any other country in the world (11 outlets per 1000 people) – with a greater diversity of vendors than any country I have seen – but that is all beginning to change just now.

India was relatively closed to the global market up until 1991 when an effort for liberalization occurred. Prior to liberalization the government hoped to help protect Indian companies, so without serious concessions, foreign corporations were not allowed into the country. By teaming with an Indian company some were allowed in, and starting in 1991 those rules were loosened. In the past three year it’s become no-holds-barred. The Indian government has suddenly shed any desire for protectionist policy with preference instead given to the idea of rapid and reckless development. To encourage foreign investment, corporations are given huge tax breaks (as in no taxes paid for the first five years of operation in India) and laws are changing so as to harm rather than help local small business.

In the US we are fairly accustomed to the commerce taking place only in a limited number of venues. Things are bought in stores. Food is consumed in restaurants or the home. Vending machines, hot dog stands, and newspaper boys all have their place, but are the exception, not the rule to being semi-mobile. In India, the general idea stands that if there is a person there who might want something it is legitimate to sell something there. Perhaps my favorite was an hour-long live infomercial by an excitable mustachioed man on a bus careening down a mountain about an amazing plasticized cotton cloth that can be used for just about anything – from a scarf to a shower curtain. He sold five.

The government splits the lines of sales into two categories; the organized and the unorganized sectors. The unorganized sector includes four big categories. Push-cart vendors walk the street with wheelbarrows, bags, carriages or trays of goods. Hawkers have blankets or tables set-up to vend their wares from. Corner stores are sometimes as small as a phone booth with a man seemingly built into a small desk in the wall. Larger retailers rarely have space enough to walk comfortably between rows and are usually located on the first floor of residential buildings.

Organized sector includes stores in commercial zones and shopping malls. Since the liberalization, we have begun to see western style stores taking over – overly lit, air-conditioned, and shiny.

The unorganized sector employs eighty times more people than the organized sector. Recently there has been a major push to make the percentage in the organized sector grow. Reasons and justification are shaky, but proponents argue that it will be healthier, more efficient, and help the country become developed. Opponents argue that this will take jobs away from the poor, destroy local foods systems, and westernize the country to an undesirable degree.

The clearest example of how this is happening was the shut down of street vendors in major cities in India and government locking of businesses which are operating in residential areas (overnight, unlicensed store owners literally had their doors welded shut this spring). The government claims that is it planning on training the millions of street vendors in proper sanitation and implementing a licensing system before allowing them to reopen and that restaurants which are currently in residential areas need to be relocated into what will become “food streets” and commercially zoned sectors, but many worry this is just a government effort to strong arm small businesses out. Many of the store owners which have been forced shut have had to sell their stores, large sections of the city are currently being bulldozed under to make room for foreign owned shopping complexes. With a middle class which is expanding by an estimated 35 million people a year (that's like opening up a whole new European country every year to the vultures) there's lots of opportunity for expansion.

One of the matters I am starting to try to tackle is how this shift in marketing is changing diet – because of course as stores westernize, as do their products. Fresh fruits stands used to abound, now they are being pushed out by packaged biscuits and the like. Cheap restaurants and food stalls are becoming increasingly difficult to find – a great loss to the millions who live on the streets or lack kitchen facilities. Yet another example of the perils of progress…