Chaos Sells in India

Read an article in the WSJ called "In India, a Retailer Finds Key to Success is Clutter" about how Indian consumers are more comfortable shopping in cramped, cluttered, noisy, often dirty environments instead of more sterile, organized environments that are common with Western retailers. Kishore Biyani has built India's largest retailer, Pantaloon Retail, by attracting Indians that have traditionally been only comfortable shopping in open, public markets. Attracting people to big chain stores carries unique challenges.

Biyani talked about three different "types" of Indian consumers:

Mr. Biyani divides India's 1.1 billion people into three types of consumers. "India One," as he calls them, are those with good educations, good jobs, and much disposable income. They also are the target audience for many foreign companies seeking to sell their wares here. Mr. Biyani estimates that such customers comprise about 14% of the total population.

Where he sees the greatest sales potential is among consumers he calls India Two: the drivers, maids, cooks, nannies, farmers and others who serve India One. He estimates that 55% of Indians -- roughly 550 million people -- fall into this category. They are seeing their wages rise and their children frequently pursue further education and careers that will vault them up the social ladder. India Three, he says, is the rest of the nation -- those at, or slightly above, subsistence level, who don't represent much of a market for modern retailers.

Given that the vast majority of consumers are what you'd consider working class, the store environments need to cator to them. An excerpt:

Mr. Biyani says he soon figured out what he was doing wrong. Shopping in such a sterile environment didn't appeal to the lower middle-class shoppers he was targeting. They were more comfortable in the tiny, cramped stores -- often filled with haggling customers -- that typify Indian shopping. Most Indians buy their fresh produce from vendors who keep vegetables under burlap sacks.

So Mr. Biyani redesigned his stores to make them messier, noisier and more cramped. "The shouting, the untidiness, the chaos is part of the design," he says, as he surveys his Mumbai store where he just spent around $50,000 to replace long,
wide aisles with narrow, crooked ones: "Making it chaotic is not easy."

Even the dirty, black-spotted onions serve a function. For the average Indian, dusty and dirty produce means fresh from the farm, he says. Indian shoppers also love to bargain. Mr. Biyani doesn't allow haggling, but having damaged as well as good quality produce in the same box gives customers a chance to choose and think they are getting a better deal. "They should get a sense of victory," he says.

Pretty interesting to see the cultural differences that influence retailing.