Eid has ceased to be a business opportunity as the fall in liquidity and inflation has seriously crippled the purchasing capacity of the consumer. The politics and the pandemic is adding to the retail mess that is already facing serious competition from the online, reports Ibtisam Fayaz Khan
Eid in Kashmir, like the rest of the world, is not a matter of faith alone. It is a roaring business, too. For one or the other reasons, the last four Eid festivals, starting in 2019, were seriously impacted in Kashmir. The continuous recession in the Kashmir markets details the costs. As the customer capacity got compromised, the market viability took a hit.
“The downfall in purchasing power of customers is for two factors – inflation and pandemic,” Mohammad Yasin Khan, the president of Kashmir Traders and Manufacturers Federation said. “For the past 5 years, the economy of the region is declining which has led to a 60 to 70 per cent fall in business.”
The low sales led to a capital blockage in inventory and triggered a cycle of deficit, both for working capital and staying updated with the market trends. Admits Khan: “Trade is sceptic over whether to buy new stocks for customers or not. There is visible lack of choice of products.”
For generations, the demand for sacrificial animals has remained the barometer of market health. In Srinagar, it is the Eidgah that converts into a live cattle market.
One of the sellers is Naik Muhammad Aziz from Bikaner in Rajasthan. Naik is one of the 11 animal sellers who have come from various sheep-rearing destinations from Indian plains, who moved in with their well-bred lambs to Srinagar, ahead of Eid. But the experience has been disappointing as the current market conditions exhibit a lack of demand.
“This sacrificial procedure is written by Allah, and whatever Allah has written in our fate, we will have it,” Naik said, insisting that some of his friends suggested him try “your luck in Kashmir this time”.
Even the local sellers are not doing very well. Farooq Ahmad Maam from Nawakadal is sitting idle under a plastic roof, keeping eye on his herd and waiting for customers to come. “The market is completely down, as there are hardly any customers,” Farooq said. “Two years back, there was no place to set foot in the Eidgah grounds.”
Farooq is the third generation sacrificial-animal seller. He gets the animals from Madwa –Wadwan and other sheep rearing areas. He has quite a few instances that are comparable with the slump he is facing now. “It seems as if a curfew has been imposed in the market,” he said.
As if the market was doing great, the Jammu and Kashmir government came with an order preventing people from “illegal” killing of cows, calves and animals. Though the internal communication between different government departments has been leaked and there is no formal order but the tensions have started mounting. The clergy has reacted and the people who have already made purchases are tense. It is too early to see how it pans out.
The crisis exists beyond Eidgah. But there are class issues involved. The establishments managing the up-market clientele have had smooth sailing.
Shahid Bashir, who runs the apparel centre, Lady Hut in Alamgari Bazar, said they have been managing better and stay in tune with the prevailing trends. Part of the success he attributes to “the social media marketing” that helps him to stay in touch with his buyers even when lockdown is around. He stays in touch through Instagram.
Parvez Wani of the footwear chain, Leatherways in Lalchowk also admitted that they have been regularly replenishing their stocks. “But I cannot deny the fact that the market is down by 50 per cent since 2019,” he said.
Fall In Liquidity
The purchasing power of people is very low and the result is that they are trying to save as much as possible and spend only on whatever is necessary. The inflation has added to the mess as the moderately earning families have to strictly enforce the budgeting.
Some traders said they factor in the situation every time, they have to make an investment. “We keep in mind that almost a quarter in a year will go to shut down and curfews,” one of the owners of a 30-year old clothing showroom in Nowhatta said, insisting that families save for the marriages. The location where they operate has remained a barometer of the situation for decades. “Petroleum prices have run havoc and even the clothing materials are impacted by it. The other factor is the India-China Dye Conflict and it has contributed to the market recession.”
The Jamia Market
Not far away from this clothing store is the Jamia Market, a commoner’s market for ages. Historically it has remained dependent on the influx of the faithful to the historic mosque but for months the Jamia remained locked.
“Shopkeepers have not brought any new stock and are finishing up the old ones as there is a constant fear in Jamia that anytime, for any moment, this place will be shut up,” Abrar Khan, who deals with products linked to faith like prayers mats and prayer beads in the market, said. “Whether there is lockdown, strikes, or stone-pelting, Jamia market is the first to take a hit.”
“I deal with cosmetics and sometimes I don’t even know when the products get expired,” Kaiser Yousuf, who runs a lady-exclusive shop. “In my career as a shopkeeper, it has happened for the first time that our products are crossing the expiry date on shelves.” Part of the blame goes to the projection of Jamia-Nowhatta markets as the “flashpoint” forcing clients to go shopping to “safer” markets.
The Online Threat
Over the years, Kashmir has emerged as a major destination for online shopping. Insiders in the online business said that the sector employs more than 2000 people – mostly delivery agents, in Srinagar alone.
“On a daily basis, almost 12000 parcels are delivered, mostly in Srinagar and the leader is Amazon followed by Flipkart and e-Commerce,” one insider, talking on the condition of anonymity said. “It could value anywhere between Rs 1.6 to Rs 2 crore, a day.”
Now, these e-commerce companies are moving out of Srinagar. “In Srinagar city around one per cent of the population is shopping online and the trend is up,” the insider said. “With additional locations being added to the delivery destinations, it is going to increase.”
This situation is making retail completely unviable. Unlike online, the retailers have to invest in space, management and working capital and after that, it will be still expensive to sell in comparison to online. “It is economy of scale at work that the retailers are frightened of,” one retailer said. “Some shopkeepers of Jamia Market are slowly selling their shops and shifting to other localities for earnings.”
As the trade is grappling with all these threats, the Covid19 pandemic is the new headache. “It operates two ways,” one trader said. “When it peaks, we stay home with businesses locked. When it ebbs, the authorities invoke SOPs and take part of the earnings as penalty.”
The Jammu and Kashmir Police has so far imposed a penalty of around Rs 3.10 crore on more than 200 thousand people in Kashmir alone. This is in addition to formal police cases and arrests. Part of this is sustained by the businesses across Kashmir.
A resident of Safa Kadal, Bilal Ahmed Sofi was in the tour and travels sector and operating from Karol Bagh in Delhi. As the pandemic peaked, he flew home. As his income dried up, he shifted to retail. “We would work with foreigners but pandemic decimated that business,” Sofi said.
Now, he runs a women’s bags and accessories outlet in the Jamia market. Though new to the sector, he is unimpressed by his working, the market and the market conditions. For the last three years, the situation is the same, he said.
(Tahir Bhat contributed to this report.)