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>>It's difficult to have sympathy for the middle-men skimming 5-10% in this story, especially with excerpts like these. The middle men nexus is so deep in the

by kamaal 5y ago

>>It's difficult to have sympathy for the middle-men skimming 5-10% in this story, especially with excerpts like these. The middle men nexus is so deep in the Indian society it can be hard for westerners to even conceive just how bad it is. There is a super market near my home called DMart, the local retailers just buy from there and sell things for 30% profit in their shops, of course the local residents eventually realize they are being ripped off, and start buying from the super market. So the local retailers bribe the managers in the super market to ensure the managers stand at the checkout registers and ensure people don't buy more than a few things(like soaps, flour etc) this creates a situation where, while the public can buy a few things from the super market they can never get enough, so eventually they are forced to go to the local retailers and buy for 30% extra. Want to rent your home? or are you looking for a rented flat? all the best approaching the land lord directly. If you do some how skip the local 'brokers'(slang for middle men), the very next day they arrive with the local mafia and extort at-least a month of rent from you. This middle men nexus extends for everything, everything from driving licenses, to property registration to passports. Though passports are little bit less of a trouble these days. Earlier the only way to get a passport application form was a middle man, they quite literally controlled who could get a passport, imagine that!! The all pervasive middle men stubbornly refuse to go. On of the big things preventing India from taking the next step is the endless middle-men/reseller attitude. The way India makes its gdp is by selling a bag of chips through 10 middle men, each takes some percentage in cut. So while the gdp numbers look attractive, things only keep getting worse on the ground. It also prevents the country from moving to the next logical step in the growth chain- Being a Makers economy.

maven29 5y ago
Talking in general, It's just that people value walkability and just a couple of loss leaders in a distant supermarket may not be sufficient incentive to get there by larger vehicles. Two-wheelers don't make sense here. You really need to weigh up the travel and opportinuty costs. Super markets might work in dense urbanized areas, but not everywhere. Certainly not when you consider the cost in absolute terms against the income levels. Maybe you'd call it a debt-trap or even stockholm syndrome but these folks will sell to you on credit and even deliver to you. This is the hub-and-spoke that actually works. These are not your faceless cashiers pointing you at a shelf. The logistics is also a real value-add and people actually take this into account, it is not something they do out of ignorance.
- kamaal 5y ago
  Well fortunately in most cities here in Karnataka, even more so in Bangalore almost every area has these small-medium large buildings where you can set up these stores, and these are reachable through two wheelers. You need to understand why Kiranas existed at the first place. People buying stuff at Kiranas are generally buying shampoo sachets, and chickpea flour in 250 gm quantities, this was needed because people didn't have the cash liquidity to benefit from buying a 1 litre shampoo bottle for 50% cheaper price than you would have to buy in sachets to make up for a litre of shampoo. Same goes with things like Atta(wheat flour), detergent, soap, biscuits, t-shirts, cheese or whatever. If you have the cash to buy 6 kgs of Surf Excel, DMart bundles another 3 kgs extra for free. If you pick up two bags of Atta, they offer that for you at 50% discount. The other part one needs to understand, I remember the early days of credit cards in India. Before that there was no way of getting a cheap, low collateral loan. The only way was going to the local marwari sait pawn broker, and pledge your jewellery for a insane interest, and often under shady terms. When the credit cards got hold, the pawn brokers went out of business almost over night. I personally know of a friend whose dad's business went out of business this way, they have a Lassi shop today. It was a net positive for India. In time people will realize mass retail super markets are a net positive.
newyankee 5y ago
Now extend this to the most labor intensive sector of the economy - agriculture. Farm laws that were created to increase competition were rolled back. Every sector of economy in India is rent-seeking controlled by a small politically powerful block whether it is 'farmers' in Punjab, restaurants in your locality or rickshaw unions. Having said that competition and awareness is much better today than 10 years back.

by kamaal 5y ago

maven29 5y ago

Talking in general, It's just that people value walkability and just a couple of loss leaders in a distant supermarket may not be sufficient incentive to get there by larger vehicles. Two-wheelers don't make sense here. You really need to weigh up the travel and opportinuty costs. Super markets might work in dense urbanized areas, but not everywhere. Certainly not when you consider the cost in absolute terms against the income levels. Maybe you'd call it a debt-trap or even stockholm syndrome but these folks will sell to you on credit and even deliver to you. This is the hub-and-spoke that actually works. These are not your faceless cashiers pointing you at a shelf. The logistics is also a real value-add and people actually take this into account, it is not something they do out of ignorance.

kamaal 5y ago
Well fortunately in most cities here in Karnataka, even more so in Bangalore almost every area has these small-medium large buildings where you can set up these stores, and these are reachable through two wheelers. You need to understand why Kiranas existed at the first place. People buying stuff at Kiranas are generally buying shampoo sachets, and chickpea flour in 250 gm quantities, this was needed because people didn't have the cash liquidity to benefit from buying a 1 litre shampoo bottle for 50% cheaper price than you would have to buy in sachets to make up for a litre of shampoo. Same goes with things like Atta(wheat flour), detergent, soap, biscuits, t-shirts, cheese or whatever. If you have the cash to buy 6 kgs of Surf Excel, DMart bundles another 3 kgs extra for free. If you pick up two bags of Atta, they offer that for you at 50% discount. The other part one needs to understand, I remember the early days of credit cards in India. Before that there was no way of getting a cheap, low collateral loan. The only way was going to the local marwari sait pawn broker, and pledge your jewellery for a insane interest, and often under shady terms. When the credit cards got hold, the pawn brokers went out of business almost over night. I personally know of a friend whose dad's business went out of business this way, they have a Lassi shop today. It was a net positive for India. In time people will realize mass retail super markets are a net positive.

newyankee 5y ago

Now extend this to the most labor intensive sector of the economy - agriculture. Farm laws that were created to increase competition were rolled back. Every sector of economy in India is rent-seeking controlled by a small politically powerful block whether it is 'farmers' in Punjab, restaurants in your locality or rickshaw unions. Having said that competition and awareness is much better today than 10 years back.