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Indians not Ready to Shop ’til They Drop

September 2nd, 2008 Posted in Cheap Asia Travel, Destination reports

As someone who has spent months in India on several occasions, I get a chuckle out of stock pick analysts breathlessly rattling on about how India is going to be a great world economic power and that it’s going to soon represent some vast hungry market for foreign goods. “Have you actually been there?” I feel like shouting to the TV.

Well, a reporter from the Wall Street Journal came out with an article this past week that says, basically, don’t believe the hype. The article, Retailers Take a Slower Road in India, discusses how all these retailers believed the rosy narrative and are losing a bundle on under-performing stores. Seems that in a land where $12,000 a year is considered a nice salary for a college-educated professional (and many live on a fraction of that), the billion residents are not quite ready to shop ’til they drop. Here are a few choice quotes:

Many outlets discovered that consumers didn’t really want their products. And unlike shoppers in Asia’s other booming economy, China, Indians are rarely willing to pay three to 10 times more for an international brand than for its domestic equivalent.

“We all have to go through some restructuring and shake-up,” says Thomas Varghese, chief executive of the Aditya Birla retail unit, which has more than 500 grocery stores. Most were built in the past two years, and few are profitable yet. “The Indian consumer is a damn tough customer.”

In a land where squeezing a few extra rupees out of every transaction is a national sport, what did they expect? Next time, maybe form a focus group of visiting backpackers, 3rd-class train passengers, and customers from the 30-rupee thali restaurant. That group could have told you that few people are going to pay $100 for a pair of Reeboks.

Besides, with news out that Bangalore leads the country in suicides, maybe retail therapy is the last thing they need.

For more on India’s uneasy lurch into the future, see Anne Cushman’s article, A Passage Back to India.

  1. 3 Responses to “Indians not Ready to Shop ’til They Drop”

  2. By Mike on Sep 2, 2008

    I had exactly the same reaction when I was there - “this is not an economic superpower.” I also thought it was strange to read about the British controlling India, because India seems like a place that simply couldn’t be controlled by anyone.

  3. By gary on Sep 3, 2008

    Excellent take. Again, amidst all the data, speculation, cheery projections and exultations about India’s economic potential, you can’t substitute history and first-hand observation to ‘get’ the accurate picture.

    Funny, I saw a CNBC special on India, and you would’ve thought that India was a mirror of The Mall of America, only with bindis and saris.

    Gary

  4. By NewWrldYankee on Sep 14, 2008

    This is beyond true! Being Indian myself, I think the pursuit of a bargain is genetic almost. Though it is true that a lot of Indians are loving the brands - try bringing New Balance sneakers to Indian relatives, “But these aren’t Nikes!” But it doesn’t mean they will fork out for them.

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