If the past two days were learning about the history and the culture of India, today was introduction to the vibrancy of commerce in India. After enduring through a typical traffic jam during the morning commuting hour, we arrived at the office building of Fifth Avenue.
What I instantly noticed was that the streets were cleaner and less congested with the tuk-tuk (a three-wheeled open air taxi) and motor cycles. We were warmly greeted by the Fifth Avenue employees and to an open office space, displayed with few samples of clothing that the Fifth Avenue manufacture on behalf of other Western clients (Diesel, Replay, etc.) and strategically placed chairs that had obviously been prepared specifically for us. We were also served tea / coffee and snacks, a practice that we saw repeatedly and appreciatively during our visits to households and companies.
The talk with the Chairman and the person in charge of the Indian retail operation was a great stethoscope to hear the beat of vibrant, yet unpredictable Indian commerce. My scant suspicion of the business climate in India, marked by lack of infrastructure, bureaucracy, and corruption, was confirmed and filled with more details and color. I wondered for a moment what more potential this country can unlock or boost the Indian economy could get if the country can solve these issues as the country shifts into a higher and more developed political setting. A speculation at this point will not do justice as I am barely knowledgeable; I’ll just have to wait and see.
What astounded me was my second finding: how far along the developmental stage that India is at in certain industries. On my bus rides from one place to another, I had been constantly reminded how developing this country is; the streets are characterized by hazardous motor cycles, constant honking, scarcely paved roads spotted with holes, people walking on the streets and animals roaming and lying in the middle of the roads. Frankly, this was exactly what I imagined India to be, inspired by fictional movies, anecdotal stories, and my past experience growing up in South Korea (a developing country in the 1980s). So, my natural stereotype was that India is a country of cheap labor where all Western firms outsource their service-oriented operations (a typical example of call-centers) and manufacturing. According to the Chairman, India’s clothing manufacturers are considered one of the higher tiers, compared to the likes of Bangladesh, Pakistan and other developing nations. Fifth Avenue had grown out of simply manufacturing apparels for its clients; the firm is bringing value-added service component, which is designing and identifying products and trends that clients may want. His statement had screamed two implications. First is the speed at which this company, and the apparel industry at large, had raced through just being the outsourcing producer and transformed into the next stage. Second is the beginning of high-value service component (fashion design and merchandising, which is predominantly done in the New York and Paris of the world) that the likes of Fifth Avenue are slowly developing and eventually competing against other Western industries. The apparel industry has largely been aided by and ushered into meet the needs of and serve the developed Western world. Internal demand is fueled with the recent success of India’s economy and will continue to grow. This can only mean bigger and better prospects for the likes of Fifth Avenue who successfully served as an outsourcing producer of the Western clients and now begin to develop expertise to compete at a higher level as a stand-alone. Again, I’ll have to wait and see.