I returned earlier this week from out of town to find three cartons of online purchases waiting for me. I wish all the items had been grouped together, since they were all Amazon fulfilled, but my satisfaction with the discounts and the merchandise outweighed any guilt about wasted cardboard and man hours.
During the dotcom boom 15 years ago, it felt as if every billboard between the airport and my home was advertising a new website. Something similar is happening now, with every other hoarding and television advertisement pitching an e-commerce venture or app. Despite the visibility of this still-new form of conducting transactions, political conversation about e-commerce is strangely absent in India.
All coverage of the phenomenon is financial analysis.
Recall that the growth of shopping malls was accompanied by reams of print dedicated to the potential and perils of consumerism. A few years later, the proposed entry of large foreign supermarket chains was pushed as an immediate necessity by one group and the coming of doomsday by another. It will cut out middlemen and assist farmers, said the first group. It will kill off small shopkeepers, insisted the second.
I thought the entire debate misleading. Big retail may take customers away from small shops, but that happens regardless of whether the supermarket chain is local or multinational. The issue was always of large and powerful versus small and vulnerable, and this was falsely mapped onto the idea of Indian versus foreign.
A bill allowing foreign direct investment (FDI) in multi-brand retail was finally passed three years ago, but little has changed as a result. There’s no sign of Sainsbury or ALDI establishing an Indian chain, and Carrefour has actually pulled out of the country entirely, having recognised that organised retail isn’t particularly profitable in India at the moment.
Big Indian chains like Pantaloons and Shoppers Stop are suffering, and the malls in which many of their stores are housed are in even worse shape. For all the hype accompanying their entry, few Indian malls ever made money. The first in Mumbai, named Crossroads, received plenty of visitors, but not many buyers, and was soon sold to a new owner who proved equally unsuccessful at converting footfalls into revenue. Over 40 malls closed in the two years between 2011 and 2013. Since then, the e-tail business has grown exponentially, further weakening brick-and-mortar establishments. A report published earlier this year found that just 12 of the 100 malls in the Delhi National Capital Region were profitable.
This state of affairs was predictable, though surprisingly few commentators predicted it. Malls have been dying a slow death in the land where they were invented, the US, thanks partly to the internet. There’s even a website dedicated to tracking mall closures across that nation. Malls in China, ten times as numerous as India’s, are also in retreat before the e-commerce onslaught.
A free ride
Last month, Amazon surpassed the biggest supermarket chain in the world, Walmart, in value, a deeply symbolic event in the continuing global shift to online transactions. So, why have left-wing intellectuals who railed against Walmart during the FDI debate said so little against the entry of Amazon and ebay? It’s true that Walmart has a reputation for exploiting workers. That gave the Left something to beat the company with, though the chain’s pay scales in the US may not be the best guide to its policies in India, where its employees would doubtless be paid far above minimum wage, as is the case with staff at McDonald’s and KFC, two fast-food restaurant chains whose entry into India in the 1990s was greeted with doom-laden rhetoric.
But Amazon treats its American workers every bit as shabbily as Walmart and McDonald’s, a fact proven by a Pennsylvania newspaper’s account of workers getting sick in Amazon warehouses during a summer heatwave. The company installed air conditioning only as a consequence of the bad publicity. Amazon’s white collar workforce appears to be no better off, if a calmly scathing article published last weekend in The New York Times is an accurate guide.
Amazon’s free ride may have something to do with its origin as a book seller. The Left’s traditional respect for books could have insulated Amazon from the kind of negativity attracted by Nestlé (for aggressively peddling breast milk substitutes to poor African women), Nike (for its sweatshops in East Asia), and other multinationals. Besides, authors criticising Amazon would be morally bound to take their publications off the site, and many may have pragmatically chosen not to shoot themselves in the foot. In any case, the Marxist theory, with a few exceptions, ossified before the world wide web came into existence. I know of no left-wing Indian intellectual who has attempted a critique of e-commerce with any specificity, and so Prakash Karat and his ilk have had no theoretical foundation on which to build an attack. It’s been left to a chauvinist party, the Maharashtra Navnirman Sena to launch the first broadside against India’s e-commerce revolution by unionising Flipkart’s delivery men and striking in demand of better working conditions.
The strike underscores the point I made with respect to FDI in retail, that Indian versus foreign/multinational is an irrelevant and misleading opposition. But misleading statements are inevitable in any argument over policy. Isn’t it better to have a debate containing such statements than no debate at all? Or is the absence of substantive discussion a blessing, for it only leads to paralysis? Perhaps we should celebrate e-commerce establishing itself without its loud advertising having to contend with political noises, and revel in this unrepeatable moment when we are being offered the products we covet at a loss to the seller.
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