Thursday, April 6, 2017

Street Entrepreneurs - 2

The informal economy in India is run by entrepreneurs providing products and services to the customers. These low-skilled occupations require low financial investments and thus have a relatively low threshold for entering. The street vendors have created a carefully constructed beehive of economic activity in the public space. They have created a functional system for themselves without waiting for government to provide them the legal permission, space and subsidy. In the series of street entrepreneurs (first part), I am presenting here a blog post by Anishok Mishra from the 2016-18 batch of XIMB:

The Cost behind the Taste - The Chaiwalas of Bhubaneswar.

Tea, or as we fondly call it "Chai" is one of India's most preferred hot beverages. Almost every person in our country has had a sip of this drink once in their lifetimes. Some prefer it black, some with milk, some with a splash of lemon and those looking to get healthier by drinking it prefer it "Green". No matter the variety or the recipe used to brew, this drink has only grown from generation to generation.

A big contribution in the same can be attributed to the numerous vendors who are situated on the streets in shops and "thelas", sporting aluminium kettles and gas stoves, serving tea to all who pass by their shops in glasses, earthen "matkas" or sometimes in plastic cups too. They all have their ways of working and their ways to making ends meet. This article attempts to take a closer look into the lives of these "Chaiwalas" and attempts to analyse how they recreate the same taste every day and the rewards they earn for their efforts.

At the outset, during the course of our short study we observed the following average trend in the expenses that surround a tea vendor:

Monthly sales (Rs) 24600
Montly Cost (RS.) 15193
number of cups per month 4920
Quantity of tea sold (liters) 388
quantity of Tea used (as input IN KG) 12
Cost of Tea Purchased per month 2898
Milk used (litres) 318
Cost of milk 9432
Electricity /Gas 587
Other Expenses 2276
Profit per month 9407

Let above figures not lead you astray. The same are simply an average of the shops that were surveyed at random and follow no patterns as such. Not every tea vendor makes more than Rs. 9000 as profit in a month. Besides this does not consider the expenses such as the cost of his equipment (Stove/Fridge/Utensils etc.) or the support staff. This means that the profit gets trimmed down even further and comes within a range of 4 to 7 thousand a month. This figure gives an insight into the hard lives that these vendors have to endure.

During our survey we approached each of these vendors with a set of questions. Although our intent was strictly academic at the start of the project, we could not help but indulge ourselves into the brimming cups of tea as they shared the information with us in a forthright manner. Be it their sales or their expenses, the "Chaiwalas"seemed as relaxed sharing this information as Toyota inviting people to study its Just In Time systems. Though the comparison may seem far fetched, the same is precisely what transpired.

During the time spent at the stalls asking for information, we observed the plethora of customers that these stalls catered to. Ranging from students who were headed back from tuition to tired office staff blowing off steam after a hard days work; or even the rickshaw drivers when they take a break. Somehow, these "Chaiwalas" have established their presence in all our lives as focal points where people meet and socialize irrespective of their occupation or status. The experience reinforces the importance of these vendors in the social landscape in maintaining a delicate balance between the lives of individuals.

Selling averagely 5000 cups a month and making only a rupee of profit per cup is a grim situation for any business. But the "Chaiwalas" have endured for the better part of a century and continue to do so serving us with a smile across their faces and the amazing fragrance of brimming tea filling our nostrils.

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This Blog is meant purely as a personal diary of a rural manager in making. It exists to record information, experiences and opinions about various issues encountered in the line of duty. Any person, institution and organization mentioned here doesn't assume any liability for its contents. This is not a deliberate attempt to defame anyone. And if you have actually read all that is written in the blog and aren't mad at me, then thanks for your time and patience !

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