India; world champion ‘surrounding economies’


Imagine that you are in an Indian train. Your luxury coupe is very quiet, the only thing that you can hear is the air conditioner, it is blowing some welcoming cool air into your face. You have traveled long, the journey took you more than 5 hours and you are now slowly entering the end destination, a large city in India. You need to disembark. Everyone who had been in India knows what happens next. You will pull out your suitcases and walk towards the door. Seconds before the trains finally stops you see a lot of movement on the platform. Street vendors, luggage carriers, taxi drivers and a lot of other folks…… they all see you as their next pray. This is the moment to sell you one their products and services! Does this scene sounds familiar? Do you recognize this? Well, there is more because India is ‘world champion surrounding economies’! And I will explain. With almost 1.3 billion people and large groups of uneducated people, living is surviving. Hundreds of millions of citizens struggle every day. They will pick up everything to stay alive. If you add a little opportunism to it – every Indian has some, and I like that – it turns out in successful business. However, it is not always successful. The reason? What happens in many cases is that vendors, sales people and other fortune-hunters will all do the same, which results in a situation where they are competing towards each other and not going for the sale. I can explain it with a very familiar example. If you want to stop an auto rickshaw in any street in India, you will probably find one in only one or two minutes. This is where the economics of supply and demand go wrong: there is too much supply and to little demand! And it happens everywhere: almost in and around every event, happening, building or initiative you will find a lot of ‘surrounding economy’. Even in the area where I work, with flashy corporate buildings, you will find a lot of tea stalls, snack outlets and small vendors, selling their stuff only a few meters away from the main gate. It looks very bustling and lively when you see it and a lot of folks from the office prefer to go outside, in some cases the food is better and cheaper than the food courts inside. I can share a lot more examples of ‘surrounding economies’ in India, so I will collect those stories and share them with you!


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