In the east, Chinese incursion in India’s festive season sales continues unchecked—Part III

Pradeep Patil, proprietor of Maharaja Luminaries in Mumbai’s Crawford Market, is visibly irritated when asked about the origin of the LED light strips his store sells. Patil reopened his shop merely six weeks ago and is now fully focussed on making up for the losses incurred during the seven months it was shut due to the Covid-induced lockdown.

“Yes, these lights are from China. What do you want me to do? Not sell them? We are selling products that we get from our dealers. Is it my fault that Chinese stock is higher,” he says.

Patil has stuffed lights worth close to Rs 15 lakh in his 400 square feet shop, which is brimming with customers, despite fears of the coronavirus looming large. But Patil is tight-lipped on sales. “It is too early to talk about how much money I have made. Let the season pass,” he says.

Like Maharaja Luminaries, many of the shops in Crawford market have Chinese products packed to the rafters. In Burrabazaar, Kolkata’s, largest wholesale market, a similar scene plays out, with shops stocking up on huge quantities of Chinese products, particularly LED lights.

‘Buy local’ and ‘Boycott China’ may be the slogan of the season, but in the large wholesale/retail markets of Mumbai and Kolkata, it is Chinese products that rule the 2020 festive season.

Be it lights, lanterns or electric diyas, Moneycontrol found that 80-85 percent of the products were made in China. It was only the mud lamps and dry fruit kits that were local.

Ever since the Galwan Valley attack by China in June 2020, when 20 Indian soldiers were killed, there has been an outcry against purchase of products manufactured in China. However, markets across India are still flooded with these products ahead of Diwali.

Thirty-two-year-old Zeeshan Sayed, who owns two shops selling lights and electric lamps in the Crawford market area, told Moneycontrol that compared to last year, a greater number of customers are enquiring about where the product is made. But, he quickly adds, this is not a factor dissuading customers from buying lights.

“See the reality is that the Chinese lights inflow has been huge. Pricing is also cheaper and they look attractive. We are not dictating what the customer should buy. They chose the product,” he added.

In Kolkata’s Burrabazaar market, rows of earthen lamps are stacked alongside rows of LED lights. Unlike in Mumbai, however, the dealers here interestingly want to portray the products as ‘Made in India’.

But a deeper check reveals that while the outer packaging of these lights has Indian names, the inner product inevitably bears the ‘Made in China’ stamp.

“No, these products are Indian. Maybe it is an error,” insists lights dealer Mahesh Tanna, who owns three shops in the Burrabazaar market. A few other products at his store had the Made in China label scraped off, to ‘prove’ his patriotism.

Four shops ahead, Kalika Lighting store owner Jitesh Gupta said that he has switched to products from Vietnam and Taiwan and explains that these are ‘less evil’.

“I also stock Indian goods but those are usually clay lamps and metal lamps. Lights are mostly from abroad but we have avoided Chinese goods,” he claims. However, one cursory glance at his products showed that the ‘Made in Vietnam/Taiwan/Indonesia’ stickers have been manually stuck on the outer cover.

How is Covid-19 disrupting sales?

Under normal circumstances, the Diwali sale season would mean a throng of customers outside stores in Mumbai and Kolkata, bargaining for hours.

In 2020, there are restrictions on crowding and social distancing is being strictly enforced across all public places, especially market areas. In Mumbai, there was a police presence in areas such as Dadar and Crawford Market and unauthorised roadside hawkers were being constantly cleared out to avoid crowding.

Hence, bargaining looks to be out of the question in 2020. ‘Buy and leave’ is the motto across the stores. Further, card-swipe machines available at a handful of stores have also been disconnected because they seem to be time consuming.

Customers are also cognisant of this fact. Sabina Merchant, a regular at Crawford Market prior to Diwali, says that she understands that shopkeepers have faced heavy losses.

“I own my own store and gift tiny lamps to my 20-member team. This year, I am bargaining less even though prices are up at least 10-15 percent across categories,” she adds.

Merchant is able to afford the price difference but many others aren’t due to lack of a steady income and job losses amidst Covid-19.

At the Dadar market, lanterns of all shapes and sizes have flooded the packed streets. But many customers walk right past the vendors after seeing the product prices.

Moneycontrol noticed 38-year-old Vrinda Parekh enquiring about lantern prices across at least 20 sellers but finally leaving empty handed. She says that products have become unaffordable this year.

“Can you imagine a kandil (lantern) costs Rs 700? Last year it was Rs 350-400. And strangely every single seller is quoting the same price and refusing to reduce rates even by Rs 50. How does a middle-class person afford this in 2020? Everyone is staying at home and expenses have increased while pay has been cut,” said Parekh, who works as an attendant at a textile store.

Slower arrival

On the one hand, while demand is high for products, the mini-lockdown across the country has forced sellers to change their product strategy.

In Mumbai’s Dadar area, Kirti Light Company, which traditionally sold clay lamps and paper lanterns, has switched to LED lights in 2020. Dadar is the hub for lantern purchases.

Owner Soham Ugale said that he had no other option because he didn’t receive adequate stocks. “I cannot afford to keep the store shut. I got lanterns at the last minute but prices quoted by producers were too high and I realised that customers may not buy them. So, I switched to LED lights,” he added.

His store has also sourced a majority of the products from China. Ugale, however, pointed out that the new LED lights would help conserve electricity and hence are cost effective.

A similar trend is being seen in the crackers business. At the wholesale crackers market in Kalbadevi in Mumbai and Burrabazaar in Kolkata, there is a mix of products from Sivakasi in Tamil Nadu and China.

Shop-owners like the proprietor of Chawla & Co in China Bazaar area in Kolkata told Moneycontrol that due to the restriction on trains, product arrivals have been very slow.

“On the one hand, cracker demand is not very high this year, maybe due to Covid-19 fears. On the other, there is a lot of delay in shipment arrivals from Sivakasi. So, we are having to stock up on low-quality Chinese crackers,” said RK Chawla.

In Mumbai, as well, the Kalbadevi wholesale fire cracker market had a thin crowd even though Diwali is less than 10 days away. Here, shopkeepers cited virus fears as the primary reason for low footfalls.

However, a few like Rasabhai Fireworks, Laxmi Fireworks and Samarth Fireworks, located one after the other in the area, are hopeful that demand will pick up closer to November 10. The Laxmi Puja festival, which is the main day of the five-day Diwali festivities, falls on November 14.

Dry fruits, cookies sellers left high and dry

Diwali gifting is what drives 65 percent of the annual revenue for the dry fruits and imported cookie sellers at Crawford Market in Mumbai.

However, with a tough economy and remote working scenario, gifting seems to be the last thing on people’s minds.

Paresh Shah of Royal Dry Fruits at Crawford Market told Moneycontrol that small businesses would primarily buy products (mostly assorted dry fruits) in bulk and distribute them to clients and employees.

“Last year, we had exhausted close to 70 percent of the stock one week prior to Diwali. This year we have merely sold Rs 1 lakh worth of goods and 65 percent of the stock is still unsold. This year looks bleak,” he says. Shah is also exploring the idea of selling on e-commerce platforms like Amazon to make up for the lost revenue.

A similar scene was seen at A-1 Products store, which sells dry fruits and assorted cookies from Europe, South-East Asia and even China. Second-generation owner Rizwan Salman told Moneycontrol that this has been the worst year for business in the store’s 55-year history.

“Two of my store employees contracted Covid-19 and hence have gone back to their home town. My father doesn’t visit the shop too often but this year I have particularly asked him to avoid coming in because it is a gloomy situation,” he says.

But even as we are chatting, Salman received a phone-call from a central Mumbai-based tax consulting firm, placing an order for 1,000 boxes of assorted cookies and dry fruits.

“Maybe it isn’t all that bad for business this year. Sorry if I exaggerated it too much. I guess it is just slower than 2019,” Salman quickly clarifies as he leaves to check the stock supply in his store room.

Salman and millions of other sellers depending on Diwali sales are clinging on to hope for now.  Where the products are from is the least of their concerns. They need to earn a living.

Read Part 1 and Part 2