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23 August 2024 at 4:29:04 pm

Festive Surge

India’s bazaars have glittered this Diwali with the unmistakable glow of consumer confidence. The country’s festive sales crossed a staggering Rs. 6 lakh crore with goods alone accounting for Rs. 5.4 lakh crore and services contributing Rs. 65,000 crore. More remarkable still, the bulk of this spending flowed through India’s traditional markets rather than e-commerce platforms. After years of economic caution and digital dominance, Indians are once again shopping in person and buying local....

Festive Surge

India’s bazaars have glittered this Diwali with the unmistakable glow of consumer confidence. The country’s festive sales crossed a staggering Rs. 6 lakh crore with goods alone accounting for Rs. 5.4 lakh crore and services contributing Rs. 65,000 crore. More remarkable still, the bulk of this spending flowed through India’s traditional markets rather than e-commerce platforms. After years of economic caution and digital dominance, Indians are once again shopping in person and buying local. This reversal owes much to policy. The recent rationalisation of the Goods and Services Tax (GST) which trimmed rates across categories from garments to home furnishings, has given consumption a timely push. Finance Minister Nirmala Sitharaman’s September rate cuts, combined with income tax relief and easing interest rates, have strengthened household budgets just as inflation softened. The middle class, long squeezed between rising costs and stagnant wages, has found reason to spend again. Retailers report that shoppers filled their bags with everything from lab-grown diamonds and casual wear to consumer durables and décor, blurring the line between necessity and indulgence. The effect has been broad-based. According to Crisil Ratings, 40 organised apparel retailers, who together generate roughly a third of the sector’s revenue, could see growth of 13–14 percent this financial year, aided by a 200-basis-point bump from GST cuts alone. Small traders too have flourished. The Confederation of All India Traders (CAIT) estimates that 85 percent of total festive trade came from non-corporate and traditional markets, a robust comeback for brick-and-mortar retail that had been under siege from online rivals. This surge signals a subtle but significant cultural shift. The “Vocal for Local” and “Swadeshi Diwali” campaigns struck a patriotic chord, with consumers reportedly preferring Indian-made products to imported ones. Demand for Chinese goods fell sharply, while sales of Indian-manufactured products rose by a quarter over last year. For the first time in years, “buying Indian” has become both an act of economic participation and of national pride. The sectoral spread of this boom underlines its breadth. Groceries and fast-moving consumer goods accounted for 12 percent of the total, gold and jewellery 10 percent, and electronics 8 percent. Even traditionally modest categories like home furnishings, décor and confectionery recorded double-digit growth. In the smaller towns that anchor India’s consumption story, traders say stable prices and improved affordability kept registers ringing late into the festive weekend. Yet, much of this buoyancy rests on a fragile equilibrium. Inflation remains contained, and interest rates have been eased, but both could tighten again. Sustaining this spurt will require continued fiscal prudence and regulatory clarity, especially as digital commerce continues to expand its reach. Yet for now, the signs are auspicious. After years of subdued demand and inflationary unease, India’s shoppers appear to have rediscovered their appetite for consumption and their faith in domestic enterprise. The result is not only a record-breaking Diwali, but a reaffirmation of the local marketplace as the heartbeat of India’s economy.

In Quick Commerce We Trust: Welcome to the Ministry of Instant Gratification

We wanted groceries in 10 minutes. Instead, we got an identity crisis with free delivery.

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Respectful public discourse isn’t exactly woven into our fabric, but a provocative photo has divided the country yet again. This time, it is Commerce Minister Piyush Goyal asking us about the price of convenience and rest assured, he’s not alone. I used to wonder who needs groceries in 10 minutes, but that was before I was seduced by the 10-minute grocery charm or racket (depending on how you see it).


Q-commerce has showcased innovations in logistics, tech-human behavioural exchanges, and retail space optimisation. But it isn’t just about getting your eggs in 10 minutes. It’s about what you’re trading off - choice, control, common sense? - that’s making us vulnerable to this irresistible impulse.


Q-commerce was not invented in India but it may be one of the few markets where it is still functional. Many Western countries have tried with varying degrees of success and failure to keep those boats afloat. Even China has some, but we’d be fools to compare India and China. Suffice to say, it is no piece of cake.


To use present-day terminology, Q-commerce is a service you didn’t know you needed until you used it. Minister Goyal’s intentions may or may not have been to evoke an emotional response, but its implications go much deeper than the startup ecosystem into a country that’s drifting where the VC money takes us. And somebody has to wake us up from our Pavlovian reveries. But before pointing any fingers, let’s look at what it reveals about us as a society.


Q-commerce can be dubbed as an optimised way to have groceries at your doorstep. Riding on the tail of the Covid pandemic and digital penetration combined with UPI, it drives one to spend more alongside increasing short-term consumption. To the untrained eye, this may appear like a good micro-economic sign, but scratch the surface and it smells more like a sugar high.


For one, not all spending may be essential and could rack up debt for some. The normalisation of instant gratification could have retaliatory effects in other aspects of one’s life, but one won’t weep over spilled milk, because within 10 minutes, another packet would have arrived.


Even though we’re not necessarily list-making shoppers with a cart and trolley, many people are cognisant about stocking their kitchens with items that are more necessary than discretionary. Maybe it’s a generational thing. Millennials and Gen Z prefer convenience over planning, and they don’t want their deliveries with a grain of salt. They want icing.


On the surface level, it may seem like a good thing that people, especially from economically weaker backgrounds, are gaining employment. But as workers operating in a perpetual “grey zone” (are they employees, contractors or platforms’ favourite “partners”) when it comes to employment status, their working conditions and labour rights don’t exactly make sexy headlines — or any headlines. While this is the bed they have chosen, they don’t need to lie in it. Gig workers across the world continue to fight for their rights, and in India, even their dignity.


Work allocations are driven by technological algorithms, and problem solving a mere hum of the machine. Workers can be barred from the platform in a heartbeat due to customer complaints or tech glitches or really anything. Nobody can tell what’s in the black box of a platform’s tech IP. Additionally, have you ever seen a delivery person drive cautiously and/or follow traffic signals? There’s your pickle. Never mind the policy.


Speaking of pickles, it’s the local kirana store uncle or aunty picking up the cheques of this convenience. Not backed by venture capitalists for whom your mind is inaccessible and probably untameable to a certain extent (think cash transactions, freedom to choose items and their quantities, freedom of prices, variety of brands), the store cannot afford to give you a 50% discount. If you observe closely, you may see a clear distinction in the price of what you’re getting online and offline. Buying on Q-commerce means you lose choice and are now effectively trapped in an online retail monoculture in a country that’s anything but mono. And that value you were seeking for the buck you’re spending? That’s just bad apples.


We’ve not touched last-mile emissions, cold storage challenges, unit economics and the dismantling of urban infrastructure yet, but you may have an idea about where this is going. This is not a criticism of Q-commerce as much as it is a question: with no VC-backing, no technological innovations and little to no difference in the goods being sold, will Q-commerce survive 20 years down the line? Is it old wine in a new bottle, with hidden costs and delivery at neck-breaking speeds? What happens when there are disruptions to supply chains (Covid-19 anyone?) in an already fragile urban infrastructure with shaky economics?


When we have answers to these questions, maybe then, we can finally eat our cake without checking if it’s available for 50 percent off — or delivered in 10.


(The writer is an independent journalist with a keen interest in environmental issues and urban ecology)

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