Jeff Bezos, the world’s richest man and the owner of Amazon, the most significant online portal, made a three-day visit to India last week. Both Prime Minister Narendra Modi and the commerce minister Piyush Goyal snubbed Bezos, without meeting him. The offer of US$ 1 Billion investment over five years in digitalizing the SMEs met with a curt retort from Goyal, that the business Mogul is not doing any favour to India by his investment, which is merely to contain his losses. Neither Bezos’s statement of new job opportunities enthused the government, which responded that those engaged in the brick-and-mortar trade affected would be many times more.
The telecom revolution, smartphones, high-speed internet and cheaper tariffs have made ordinary people technology-friendly. Amazon, which started as a bookstore, expanded its palette to offer anything under the skies and grew exponentially in the last decade.
Large stores like Walmart and Carrefour, considered invincible until recently, attract lesser crowds, as online portals like Amazon have chipped deep into their territory. The impossibility of urban cities to grow horizontally have made roads more congested than ever. Lack of jobs has forced hawkers to encroach every pavement and parts of many roads, making city walk no more pleasurable. Online trade has mitigated the pain of making to the markets and stores.
The advantage of online is, one can crosscheck on the prices and various qualities at one go. The initial apprehension of fraudsters palming off poor or imitations is watched and acted upon by law enforcing agencies. ‘No questions asked,’ replacements have become prevalent, adding to the customer’s confidence. To get a firm foothold on the vast Indian market, most Online operators have gone for predatory pricing, offering impractical discounts. Last fortnight one such online portal provided 47% discount on most of their products. No wonder, the ultimate consumers have never had it so good, changing their loyalties from the time-tested street corner Kirana shop.
There are 12 m Kirana shops, not taking into account tiny ones. On average, there could be three employees in each shop, which makes the directly affected 36 m; four dependent family members for each one of them would make the total to 144 m. Then there are Super-Stockists, wholesalers, distributors middlemen, salespeople etc. In a country like ours the men engaged in this trade, estimated to be $ 700 Bn, is too large. Not all will be adversely affected though, as the retailers also wait for ‘offers’ from big portals or large wholesalers like ‘Metro’ to cash in on the discounts.
The English traders also stepped in with humility and fair-trade guarantee. They made our country pauper and famished our lands to earn profits. The lure of deep discounts is not sustainable and will soon vanish, with regular prices prevailing. No business can underwrite hundreds of millions of losses in dollar terms, which is what is the scenario today. Coming to the trade arena with deep pockets, the biggies like Wal Mart (Jio Mart), Amazon have the power to shake and uproot, if not all, many small traders.
It will be interesting to see as to what the discerning and crafty Indian consumer will eventually prefer, whether Online or Kirana stores. The barren stores in the flashy Malls world over, do indicate the future.
Piyush Goyal wouldn’t have lost anything by meeting Jeff Bezos, despite he owning Washington Post, considered unfriendly to the present Indian Government!
Sampath Kumar
Intrépide Voix
