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9 Management lessons from the street vendors of Mumbai

In most developing nations, the highest contribution to the GDP comes from the unorganized sector i.e. the businesses that aren't registered and pay taxes. In India, the unorganized sector contributes almost 50% to the GDP and hires almost 80% of the workforce. On the flip side, Indian Inc i.e. the organized sector is cutting jobs. For these companies, their stock price and market valuation are increasing but they aren't hiring as much as the unorganized sector. To address this problem, we need to learn a few management lessons from the street vendors.


9 management lessons from the street vendors of Mumbai


ROI per square feet

  • ROI is exponentially higher for street business as compared to the corporate even after paying the municipality and other charges.

  • Marketers struggle for shelf space, especially in the FMCG sector. The roadside seller needs to design his product mix in such a way that only the fastest-selling goods are carried.

  • This product mix is testified by his sweat equity.

  • Learning: For any marketer, when your product becomes a part of the product mix of the street seller, you have arrived.


Image Source: The Better India



Equitable distribution of equity

  • A street seller shares his profit with the whole supply chain starting from his vendor to the customer.

  • A corporate only shares a small percentage with the supply chain.

Photo by Veera Jayanth on Unsplash


Degree of empowerment

  • A large conglomerate will take weeks to accept a 5% discount but a street vendor will give you a discount immediately.

  • The decision is quick on the street.

Photo by Sudarshan Poojary on Unsplash


Change management

  • A street business changes it's business 12-15 times a year.

  • Change in products to match festivals.

  • Change in segments to match the demand.

  • Change in the sales pitch to cater to the respective target audience.


Photo by Akhil Chandran on Unsplash


Smart planning without using smart applications

  • The street business plans ahead to meet the demand.

  • They do all the planning without ERP application or any other automation.

Equal opportunity market

  • The only market that hires everyone.

  • Doesn't look at your education, religion, caste, gender, domicile, etc.

  • Corporate houses talk about gender equality but these street businesses implement it.


True opportunity cost

  • A corporate company will not mind if they miss one opportunity in a quarter as it can be substituted in the following quarter.

  • A street entrepreneur will leave no stone unturned to sell the product as he knows that if he doesn't sell, he will have to sleep an empty stomach that night.


Know the decision-maker

  • A street beggar is persistent. He doesn't budge unless he gets the money.

  • The beggar knows who exactly is the decision-maker whereas in the corporate we don't even get the opportunity to talk to the decision-maker.

  • Once the beggar gets the money, he goes back and tells his team to approach the same decision-maker. In the corporate, one account is handled by one person and no business goes to the other person from the same company.


Know when it is enough

  • A street entrepreneur knows when it is enough but a corporate will always go for higher market share, acquisition, new markets, and more.

  • To co-exist you need to fulfill everyone's plate and not accumulate what can be for others.


We don't need unicorns i.e. $1 billion valuation companies but we need million 100,000 valued companies. For this to happen, Captain Raghu Raman has suggested creating a WEE SEE fund (not VC). It simply means when I see I can make a difference, I do it. It's not necessary to help people with only money, it can be via sweat equity, assistance, sharing of ideas, etc.

This post was inspired by a talk by Captain Raghu Raman, here's the video. I will try to make more posts on my learnings from such leaders.


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