The Emerging Indian Middle Class

May 3, 2008

in Accelerating Innovation, research

I made my first visit to the Dharavi Slum yesterday. Often described as Asia’s largest slum it remains central to Mumbai’s development and thriving economy. I have a few stories and themes that I want to weave together.

I cannot help having the stark contrast in mind when we define the US middle class. Recently the US election candidates have been touting income spans up to $200K as middle class for tax packages and planning. I grew up with the stereotype of two cars in the suburbs and a color TV. This isn’t what middle class means in India, even though they now talk about a middle class approaching 250 million. It isn’t the middle class we know and yet this group is changing everything and on the cusp of India’s change and boom.

What’s middle class? In part, this is what I saw with my eyes and yet the other details I cannot begin to get my head around. In the Dharavi Slum you may have up to 650 families per acre. Redevelopment programs are happening and people are being displaced; although it is hard for me to see how this place would be better as a result of such developments. There continues to be local resistance to these programs.

Sakina invited me into her home. Entry is by a steel ladder. Her home is much lighter than the home below with a “clearstory” open air skylight. In total it is 225 square feet. Basically 10 feet wide and 22 feet deep. Near the entry there is a nicely tiled toilet and shower and running water. (This is not common!) She has a small kitchen with LPG stove and refrigerator. The house also has a TV (older) a landline phone for inbound calls only and an Aquarium close by the front door. Bed and bedding cover the rest of the space. I sit on the bed almost afraid to stand with the two ceiling fans on and not wanting to tower above them.

While drinking Chai members of her family come and go. Her son is in the 9th Standard (15 years old) and will get a cellphone after passing the 10th standard she says. Her daughter in law comes in and starts preparing vegetables. She squats on the floor and starts cutting them in her hands and dropping them into a stainless steel bowl. Pottery or china is a luxury with perhaps the exception of tea. You can see why everything is done sitting on the floor or perhaps sitting on the bed. They will eat sitting on the bed probably watching TV. I don’t even remember a chair or stool in the place. No table.

Her husband works in Dubai she didn’t want to go and leave family and work permits probably made it impossible. I must say the room was spotless. She had a mobile phone. No PC, or computing equipment in the house. A huge picture of Mecca. Many of her family members work outside Dharavi. For many it’s a choice to continue living here. My guide too although his “car for hire” business is run from one of the suburbs.

After having tea we dropped down into the street. Two doors down, downstairs I entered a similar sized space. 4 people were making sandals. These were for wholesale and would be branded later. They make 15 to 20 pairs a day. They had a number of clear plastic bags against the wall. It represented about a weeks work according to them.

Upstairs there was a T-Shirt manufacturer. Maybe 5 sewing machines. All were busy. There was almost no room to move in there. They would have gladly stopped for me. Oh did I say it was close to 100 degrees in all of these spaces? You can also forget about safety, wiring, etc.

Both these factories would appear to be owned by the same person or someone in the family and perhaps some relation to Sakina. Not really quite clear. They all pointed out the Redevelopment Banner. I really can’t see how they would be better as a result. I doubt they enable the factories in these new housing centers.

Around the corner there are STD (phone kiosks) everywhere. I passed an Internet cafe in this area (15 rupees per hour, no discounts etc.) There were 7 PC’s in it and the owner actually worked for another man managing clothing production for Marks & Spencer. The cafe was full.

This world remains a long way from being connected beyond the cellphone. Then I learnt more about that from a group of 13 year olds and that’s another story.

This little visit and snapshot for me was invaluable. Too few companies and visitors come and see these things. While you can commission research in India unless you have a keen eye or some way of internalizing that knowledge back home you aren’t going to come up with better products. Often it’s a few stories that you will take back home Whether Finland, Chicago, or Palo Alto you won’t begin to understand “sound” or “dust” or “recycling” in an Indian context.

Let me close with a couple of examples. PC Dust covers (not seen in Dharavi but covering electronics is common) and just the thought of a hot laptop burning one’s thighs (where are the tables!) or the inadequate speakers that laptops come with. Laptops fit the space better and it would be worth exploring the “lap” factors. Similarly, my learning from the “China Phone” (yet another story) is that all laptops have inadequate audio built in. They cannot even compete with the latest phones for “music”.

In a market that is exploding with mobile phones (10 million sold last month) low end laptops (15000 to 20000 rupees) are competing against them (full featured china phone 4000 to 6000 rupees) and new TV’s (5000 to 10000 rupees). I didn’t go into the PC markets this time. I’ve visited them in Delhi in the past and just running out of time.

I just suspect that the ALL in One that we see in mobiles (There are “China phones” available with TV’s built in plus the MP3 and FM radio) means…. no requires one to really rethink the multimedia laptop. I certainly would be if it was my job! There are a huge number of opportunities here and a dumbed down Macbook is not the answer.

For a few more pictures. Huge thanks to Dina for arranging it. I’m cross-posting this week.

  • http://blog.wachob.com Gabe Wachob

    Wow! Great story, Stuart.

  • Jon Husband

    I keep thinking something like the Asus Eee PC is another step towards a response to your points about small, powerful enough, inexpensive enough (approx. $300) … quite small, quite light, solid state, comes in either Linux or windows version, and Asus just released a third party developers kits

  • http://www.henshall.com Stuart

    Thanks Gabe and Jon!

    Jon, you are quite right about the Asus PC and the cost trade offs are very interesting. I’m going to write some more up on the PC and mobile world. I don’t think the Asus model will cut it… The all in one mobile is going to win big in this regard.

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