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Mumbai’s Street Vendors

by Sagar Gubbi last modified 2008-06-12 09:53

A trip to Mumbai helped me visualize the massive size of India’s informal sector and I now imagine Mumbai's street vendors as critical links in BoP businesses.

I was in Mumbai a couple of times last month – once on a personal weekend trip and once on a single-day work visit (from Bangalore’s brand new airport, which is quite far from the city and getting there from where I live - South Bangalore – can be quite stressful). The weekend trip was super fun – I attended a close friend’s wedding in Andheri, spent some leisurely time walking on the streets of Mumbai along with a few friends, paid visits to Haji Ali – a charming dargah on a small island off Mumbai - and Mahalakshmi temple, travelled in Mumbai’s famed local trains, had some wonderful street food (vada pav, bhel puri, pav bhaji, pani poori etc…..YUM!) at Chowpatty and had a nice dinner at Leopold’s in Colaba – a vintage café/pub made famous by Gregory David Roberts’ bestselling novel “Shantaram”. I had been to Mumbai several times before, but this was perhaps the first time that I got a chance to see - as my friend Ammu would say - the real ‘Aamchi Mumbai’.
 
Walking on the streets of Mumbai, I just couldn’t help but notice the huge amount of business transactions that Mumbai’s street vendors conduct everyday. From ‘Chaat’ (Snacks) to ‘Limbu Paani’ (lime juice), from snazzy electronic gadgets to gaudy perfumes, from ‘Neke’ shoes to Van Hussain’ shirts, one can find almost everything for sale on Mumbai’s streets. Of course, I have seen this kind of ‘street business’ in Bangalore and other Indian cities too, but nothing can compare to the sheer volume of business that Mumbai’s streets conduct everyday. These vendors are ‘street-smart’ and know how to make their money. Apparently, there are a few such street vendors who own cars and large apartments in Mumbai!
 

The informal sector is never included while evaluating economic parameters of India - such as GDP growth - perhaps because not many of these street vendors pay taxes, though they end up bribing the cops to obtain their ‘licence to sell’ on the streets. What I found especially interesting was the customer base of these street vendors. Though their customers include people from all sections of the society – from the very rich to the urban poor – a vast majority are from the lower middle class and poorer sections. I personally feel that there is a lot to be learnt from these vendors - the businessmen in Mumbai’s informal sector. Agreed that many of them sell counterfeit and smuggled goods but they do understand the base of the pyramid market much better than any multinational company’s sales and marketing departments; they know what sells and what doesn’t among the poor. More importantly, they understand the needs of the poor. Entrepreneurs or corporations targeting the BoP markets will do well to tap into the knowledge base of Mumbai’s (and India’s) informal sector. The knowledge that these guys have, can be valuable in conducting market research, developing products and carrying out marketing campaigns at the BoP. It would be even better if they are engaged as critical links in the value chain, such as franchisees. This could be a win-win situation for both sides and to the country as a whole since such an arrangement would help in formalizing the informal sector.

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