Vegetables. for a week, for a family of four : Rs 175 ( $4.5)
Rice - Rs 24/kg ( 25 cents a pound)
Mango - Rs 30/kg - Banganapalli - (32 cents a pound)
Taxi to the Airport (Quite far) : Rs 300 ( $6.5)
Eating out :
Nice Buffet - Rs 250-300 ( $6-7)
Unlimited South Indian meal - Rs 60 ($1.5)
Limited North Indian Meal - Rs 40 ($1)
Haircut - Average place - Rs 40-60 ($1 - 1.5)
- Upscale with Shampoo and Dry - Rs 200 ( $5)

The list can go on…..

Yes, Consumer Goods like Shoes and Shirts are very expensive. Either it is the duty component that plays a role in this OR it is because they are aimed at the middle and upper middle class and hence not discounted as in the US.

But as they say, when you seek out, you can get what you want at a good price.

I happen to frequent this nondescript store, which sells “for export” type of clothes (Gap, Banana Republic, Abercrombie ….) where one could buy a shirt for about Rs 250-250. Conceptually similar to Ross or Marshalls but unlike those stores, these stores are very well maintained and well laid out with excellent customer service.

1. Many consumer goods MNCs which entered Indian relatively (to HUL or P&G) recently have adopated a market skimming strategy. Investment is minimal leading to smaller volumes and higher margins.

2. Modern retail is the most inefificient model of retail trade in India (so far), fixed and opertional costs are very high.

3. Reebok and some other brands are very myopic and are happy serving only the top 2% of the Indian population.

Comment by Shalini Amarnani — January 29, 2008 @ 9:21 pm

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Umm, do you live in India? I do. Can you please point me to the location where you can get stuff for 1/10th the price inside a supermarket? Even assuming you are being rhetorical, this is more than a wild exaggeration. Here are prices on the “street” in Vadapalani, a suburb of Chennai:

Vegetable/Fruit Street/Kirana Average Reliance Fresh/Subiksha

1kg Simla Apples Rs. 65 Rs. 72
1kg Guava Rs. 28 Rs. 26
1kg Orange Rs. 62 Rs. 68
1kg Rice Rs. 22 Rs. 22
1kg Tomato Rs. 18 Rs. 16
1kg Potato Rs. 18 Rs. 17
1kg Cabbage Rs. 12 Rs. 18
1kg Carrot Rs. 24 Rs. 22

Mysore sandal soap: Kirana Rs. 20 Supermarket: Rs. 20
Clinic Shampoo: Kirana Rs. 54 Supermarket: Rs 55
Terry Towel: Kirana Rs. 145 Supermarket: Rs. 150

These are ordinary items purchased by everyday middle-class Indians. The interesting thing to note is that some items are actually cheaper in supermarkets than in Kirana stores. It is even more interesting to note that even in the US, prices are not that much higher for things like towels, soaps, shampoos, fruits etc. Of course for things like electricity, electronic goods, petrol, cars etc, US is cheaper. Services like Internet access, for which I am paying 28$/month for a paltry 2Mbps/5GB Tata Indicom connection are more expensive than the 30$ RCN 8Mbps/unlimited and reliable connection available in the US. Mobile phones and plans, which are supposedly cheaper in India, turn out to be as expensive, or more, than comparable plans in the US which charge 40$/month for 450 anytime nationwide minutes, unlimited mobile-to-mobile minutes, and free nights (9pm - 6am) and weekends. As far as purchasing property goes, most metros in India, where modern jobs are available, are increasingly out of reach for the middle-class. Rents in Chennai for a 2-bedroom apartment in a complex with mediocre infrastructure average an astounding 400$/month, not much lower than the typical 750$/month in Austin, Texas. Including commuting time, working hours in India are quite long as one typically spends more than 12 hours outside the house. That plus the lack of open spaces like parks etc to go walking/jogging/playing with family, and also the animal road rage on the streets and chaos and pollution, makes it quite stressful.

My sobering conclusion is that life in a metro in India is actually as expensive as a typical midwestern or southern US city. Those people living on the coasts in the US should try and shift to these locations in the US, rather than coming back to India, unless of course they can negotiate a US-level salary in India. It looks like India is optimized for an Indian farmer’s life, while the US is optimized for a modern lifestyle. People need to adjust their expectations accordingly or there will be disappointments. To the typical knee-jerk crowd, who amusingly might live in the US, you need to actually do a complete analysis like the above and back up any disagreements with facts.

What you say may be true of groceries, but not too sure if it’s true of apparel/ shoes.

Yes, there may be shoes and clothes from street vendors that are cheaper than from stores in India in the malls or the air-conditioned stores but the question is, how do these street vendor items compare with stuff that I’d get in the US? If we did an apples-to-apples comparison in terms of quality, the US would still come out cheaper — much cheaper.

@ Giri Guevara says Why did you buy Reebok in India? Try Bata’s latest line of Sneakers

Giri — the point wasn’t about my buying Reebok or Bata… it’s about the prices of similar quality items being much higher in India vis-a-vis the US, even when many of these items are made in India and exported to the US.

Re Bata: I can buy sneakers in the US comparable to Bata’s quality for $20 to $30 (Rs 780 to Rs 1150) which is the same or cheaper than what Bata sells for in India (I think)

1) Custom duties on imported products. Much higher than in the United States.
2) Relatively low volume.
3) On non-imported local products like Color Plus and other Indian brands, these are aimed at the well-heeled customer. For the same reason, they are discounted rarely.
Whereas in the US, a brand like GAP which would be equivalent in quality to most of the good Indian brands, is meant for the average joe and is also priced accordingly but a brand like Façonnable is rarely discounted.
4) A low cost economy like India is not very efficient. The distribution and transportation costs are higher than what it should be.