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Home--News
Supermarkets Devour Indian Traders
By Sanjoy Majumder
BBC News
May 21, 2007
For generations, Indians have shopped for food and groceries at open
markets and from roadside vendors.
But this is now beginning to change as a number of large Indian companies
are setting up western-style supermarket chains to cater to the country's
growing middle class.
The American chain Wal-Mart is poised to enter India next year and
the UK-based Tesco is hoping to follow - all hoping to corner a part
of a retail market valued at $330bn a year and growing all the time.
But as Indians change the way they shop, it's also beginning to affect
the lives of millions of people who work in the large, unorganised
retail market.
The vast majority of them are poor villagers who migrate to the city
in search of work and end up selling fresh produce in a neighbourhood
market or from a pushcart on the street.
Noisy and colourful
As dawn breaks out, most Indians head out to their local market.
Noisy and colourful, the markets are typically set up in the open
air, with only the simplest of protection against the elements.
Most of the sellers squat on the ground, on burlap mats, surrounded
by an astonishing variety of seasonal fresh fruits and vegetables.
Succulent watermelons compete for space with apples and oranges while
in another corner green leafy spinach and fresh mint is piled up high.
Bag in hand, the seasoned shopper moves from store to store as the
sellers call out to them.
They stop to examine and haggle before they strike a bargain.
At the end, they walk away with a day or week's supply of fresh produce
for the family at unbeatable prices.
This is the Indian retail industry - unorganised, seemingly chaotic
but generating sound business.
But now, there are signs of a change.
Competitive prices
Across Indian cities and towns, brand new supermarkets are rapidly
cornering a slice of the business.
In the capital, Delhi, India's giant Reliance group have set up a
chain of Reliance Fresh stores, selling fresh produce at competitive
prices.
But for a sign of the future, I head to the upmarket suburb of Gurgaon
and the newly opened Spencer's hyper mart.
It's aimed at suburban shoppers - most of the people wandering through
the shiny aisles are professionals - doctors and lawyers, IT workers
and bankers.
On offer is several thousand square feet of air conditioned space
with just about everything under one roof - fruits and vegetables,
meat and fish and freshly baked bread.
There are also electronic goods, clothes, fast-food counters and a
bookstore.
Samar Shekhawat, vice-president of Spencer's, says this is one of
eight hyper marts spread across the country.
"We would like to provide consumers a 360 degree solution - the husband
can browse through the bookstores, while his wife shops and their
children grab a snack at the cafe.
"It is our belief that people have moved from asking for value for
money to paying money for value," he adds.
With a wide-range of produce and products, chains like Spencer's can
offer competitive prices and it's an experience that's clearly going
down well.
Mrs Chibber is a lawyer and has a family of four. She's shopped in
traditional, local markets all her life but now she's made a lifestyle
change.
"In my local market, I had to spend a lot of time going to several
different shops in the hot sun. And you still may not get what you
want," she says.
"But here you have a wide variety of goods, everything is available
and it's comfortable. You are not exhausted by the time you go home,"
she says, as she wheels her trolley towards the check-out line.
Most vulnerable
Even as middle-class Indians are beginning to enjoy the fruits of
a retail revolution, it's beginning to threaten many others who survive
on the trade.
Indu Prakash Singh works for Action Aid and believes that it is creating
a major problem.
"Millions work in the unorganised retail sector. They are also the
most vulnerable because they work long hours for relatively low margins.
They are being directly affected.
"We have already seen that in places where these supermarkets are
coming up, local vendors are losing 40% of their business. What we
are seeing is a big divide being created, between the super elite
and the poor."
You don't have to travel far to cross the divide. Less than a few
kilometres from affluent south Delhi is the sprawling neighbourhood
of Sangam Vihar.
It's congested, with houses built so close to each other that they
block out natural light.
Dirt-tracks pass for roads where children play amid filth - from the
open-drains on either side and the garbage strewn around with flies
buzzing.
This is where many of the vegetable sellers who cater to south Delhi
live.
Mukesh, a vegetable seller, is slowly wheeling his cart back home.
His day began at four in the morning, when he set out for the wholesale
market an hour away by foot. From there, it's another hour to the
market where he plies his trade and then another couple of hours back
home.
But the past week has been nothing short of disastrous for him.
Booming economy
A brand new Reliance Fresh store opened down the street and he's lost
half his business.
"I'm struggling to sell most of my vegetables. Whatever is left over
is simply sold at half-price or thrown away. I cannot store them,"
he says.
He has four children and his wife is worried about the future.
"It's expensive living in Delhi. If we have no money, there's not
enough to eat and pay our bills. I really don't know what we'll do,"
she says.
I ask Mukesh if he can find any other work - maybe even at the supermarket.
He laughs.
"There are educated people in this city who are unemployed. How can
an illiterate man like me expect to find work?
"No, I don't think there's much else to do. If I can't make it here,
we just have to go back to our village."
There are 40 million people like Mukesh employed in India's unorganised
retail industry.
Like him, they depend on daily earnings to support their families.
And as India transforms under its booming economy, they're beginning
to wonder if there's a place for them in the new India.
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