sidin

Organized retail is the new zing thing in business. Everyone wants to do it. Reliance and Tata are doing it. Bharti and the Birlas are at it. And the firangs are lining up in the dozens with money in the millions and cheerful joint venture deals in their chic leather bags.

And over everyone looms Kishore Biyani and his Future Group. (Bless us Kishorebhai!).

Prima facie the rationale for the frenetic action in the retail space is easy to explain and understand. Our existing retailing setup has, ostensibly, several things going against it. There is lack of clarity in pricing, low choice, poor customer service and humoungous wastage.

At a recent retailing conference in Delhi someone working for a recent entrant in Indian retail mentioned that something like one-third of all the fruits and vegetables harvested in the country was destroyed because of poor storage and transport before it even reached a point of sale. And poor infrastrucutre and several layers of middlemen wasn’t helping either.

This is one area where organized retail is expected to help both consumer and farmer. Reliance and ITC have already setup vast procurement networks that give farmers better prices and reduce transit times to store to the bare minimum. A recent press report said that Reliance was even procuring sub-standard produce to help out local farmers. This was then being sold at Reliance Fresh stores at low prices.

So far so good.

But the opposition to organized, rather corporatized retail, has been as loud as the buzz going for it. Everyone upto the Prime Minister Sonia Gandhi Manmohan Singh is thinking about how all this is going to affect the small retailer. The little fellow in the kirana shop is suddenly in the thick of things.

So last week I went to one of Mumbai’s oldest retailing hotspots to check out what it felt to do retailing in the good old fashioned Indian way. And to probe a little into what some of these traders felt about the spanking new mall and hypermarket revolution.

Lohar Chawl is the nerve centre of trading and retailing in Mumbai. You won’t find a Shopper’s Stop or a Big Bazaar here. Instead you will find rows upon rows of tiny one room shops lining narrow, crowded streets that boil under the noon sun.

It is not a pretty site. In most places the streets choke with traffic, people, handcarts, cycles and trucks. Often the streets have been dug up and left covered in rubble. And it looks like things have been that way for months.

On either side you have shops some of whom have have boards that proudly state their heritage.

“Since 1935″. “Fifty years of service”.

“My grandfather was the first power tool dealer in Mumbai” says the owner of a messy little shop that clearly looks past its prime. In one corner there is stack of broken drills and grinding machines piled up under a layer of dust and rust. In a room in the back a young man, a relative he tells me, is busy repairing a drill. “Now there are a hundred stores just in Lohar Chawl. And margins have fallen too. We recently started repairing services to make more money. We even sell motors and fans to make ends meet” he says pointing to some domestic pumps lying by the door.

To the untrained eye it all looks like something out of Dante’s inferno. At least it feels like that. A thermometer in a shop window sombrely read out the temperature: Forty one degrees.

There is a constant din around as you walk down the streets trying to avoid getting run over by autos and pick up trucks or tripping over motors and huge ball bearings. This is sheer everyday commerce. Its not the glamourous retailing of Phoenix Mills or Hypercity. But the mundane everyday trading that, pardon the cliche, greases economy both inside and outside Mumbai.

“I sell 20% of everything to people outside Mumbai. Pune, Nasik, Nagpur. They can get stuff there if they want to. But 30% of the stuff there is duplicate. They trust me. I make my own cables too you know. I bought a small bankrupt cable unit last year.”

This from a man who owns a chaotic one room outfit that specializes in cables and switches. He reaches onto a shelf and hands me a shady looking packet of house wiring cable in shirnkwrap. Galaxy. “Its not too bad” he says smiling. His shop is divided into several man-wide aisles by floor to ceiling metal shelves. They strain under the weight of hundreds of boxes.

I think he might be a little drunk. Later I find out that the guy makes several crores out of that one small crummy store.

And Lohar Chawl, literally “Iron Street”, is not just for those looking for a good deal on power tools and industrial supplies. The street branches out to lanes that specialize in a plethora of items: Textiles, Pharmaceuticals, Testing Instruments, Costume Jewellery and by the time you wind your way up to CP Tank road there is even a whole street dedicated to Wedding Cards. One swanky looking card store proudly proclaims “Only for NRI Customers”.

Outside a crowded switch retailer’s shop I spend a few moments talking to Aparna Gopalakrishnan. She is renovating her home and is on the lookout for some great deals in modular switches. “If you are smart and do your homework Lohar Chawl is the place to come. These guys stock all types of brands in all types of price ranges and they spend time with you when they know you are serious. And a 25% savings to boot. The sweating is worth it.”

Whoever calls these retailers unorganized is way off the mark. These clusters of specialists ensure that the customers gets what he wants from one broad location. Sure the heat can be excruciating but you get the job done at competitive prices.

“We even barter” quips a fan dealer while he shoves boxes across the counter. “I am an authorized dealer for one brand. I don’t carry anything else. But if someone wants Orient or Khaitan I just pick up a piece from my neighbour. I will do him the same favour when the time comes.”

And its not just the customer who benefits.

“This way I dont need to carry too much stock either. Between the few of us dealers we carry a lot of material. Everyone’s happy. Now can your Big Bazaar or Pantaloon do that?”

No way Jose.

He continues: “We just keep some 2 or 3% margins sometimes. Sometimes we sell at cost too. All depends on the customer, the relationship and things like that. I can price every customer the way I like. Extend credit when I want to. Demand cash if he has it or I need it. No stickers. MRP means nothing.”

Sunil Jagade, a freelance consultant working with a pump manufacturer, often hits Lohar Chawl to buy motors for his client. “Some of the larger dealers have warehouses full of material ready for delivery. And they have IT sytems that give them uptodate information!” He walks into a dealership and reemerges just five minutes later. “The material will go to my client directly from their Vashi warehouse. That’s customer service.”

And between all the shops are a plethora of what some might call “business services”. Courier counters, restaurants, xeroxing, trucking services, packaging services and several restaurants.

When I decide to finally call it a day I am told to drop in at Badshah Cool Drinks for a khus sherbet. It is a landmark in the locality and the drink was cool, long and refreshing.

As I walk to Churchgate wiping the sweat from my brow I can’t help but wonder how Lohar Chawl can ever be replaced. No doubt they will face their challenges. If it happened to fruits and vegetables it can happen to switches and fans and motors as well.

Perhaps they will device a way to fight them “organized retailers” too. They are resourcesful, these traditional retailers.

But why take chance. A trip into the bylanes and alleys of Lohar Chawl is well adviced. It will give you a taste of what real desi retailing is all about. Just carry lots of sunscreen.

And hopefully you will last long enough to earn a sherbet before you leave.