India’s Muslim business communities are stagnating . They are unable to take the advantage of vibrant Indian economy as well as Information Technology revolution. The western India, Gujarati Muslims - a mix of Memon, Bohra and Khoja, the leading Muslim business communities with a significant presence in trade and industry are paying a heavy price of neglecting education. Today, the entire generations of these communities are unable to grasp the dynamic nature of the economy and changing profile of the market. The Indian Memon community is worst affected. Forget about growth, the current generation of semi -literate Memon community is finding it hard to match the onslaught of organised retail. Basically, Memons are traders. Memons today are losing the market share to modern retail and many small outlets owned by Memons are facing the threat of closure. For example in south Mumbai, there was a prosperous timber market famous by the local name ‘Kazi Mohalla Lakda Market’. The majority of timber merchants were Memons. Today 90 % of the shops have closed down and many Memon families are still struggling for survival.
Another Memon dominated timber market is located in central Mumbai,at, Mustafa Bazar. Once it was the largest timber market in Mumbai. Just a cursory look reveals that many of the shops have closed down, others have rented out the premises and those who are surviving is only because they have accepted the challenge and introduced new products and services.
Similar is the plight of Bohras. One of their big brands is Akbarallys, the pioneers of retail in Maharastra. Last year, one of their major outlets at Santacruz closed down because it could not sustain itself on the face of competition. The remaining outlets are also stagnating in term of business and investment.
In the past, it was sellers market. In the current market scenario, it’s the buyers market. Consumers make buying decisions based around the perception of the brand rather than the reality of the product. While this means brands can become more valuable than their physical assets, it also means they can lose this value overnight. After all, perception is a fragile thing. So unless and until Muslim entrepreneurs learn to manage public perception by introducing new products and better services and take the assistance of professionals, survival will be at stake.
What is the major reason for the decline of these business communities? According to marketing guru Michael Porter, there are Five Forces of Competitive Position, entry ease/barriers, Supplier Power, Competitive Rivalry, Buyer Power, Product/Technology development.
Unfortunately the Muslim business communities have failed on all the five fronts. Let’s analyse each factor.
Entry ease/barriers: One of the main reasons for the success of these communities in the past was the mechanism of intra community support system. Entering into business for any member of the community was made simple by financial, and business know- how assistance. Currently the community support structure has collapsed.
Competitive Rivalry: On one hand, there is a fierce competition amongst the small business and on the other hand ,they have faced assault from organised retail and big business houses. Today Chilyas restaurant are struggling because they are facing continuous onslaught from the other restaurants who keep on introducing new dishes, improved ambience and better services.
Buyer Power: Today Muslim middle class is also expanding and expect better quality products and services. Across cities like Mumbai, Pune, Baroda, Ahmedabad, Surat, Hyder-abad, etc the hub of traditional business communities, even in the Muslim dominated areas the major brands are replacing the traditional Muslim business.
Product/Technology development: The less said the better. When it comes to multinational corporations, their approach is think global, act local. Today software such as Customer relationship management and Enterprise Resource Planning is being used by the big corporations as they have huge financial muscles. Small business houses need to invest atleast minimum in the technology.
What’s the remedy? Unless and until these business communities invest in education and persuade its young generation to go for higher education and also build up relationship within the bureaucracy, their survival will become more and more difficult.
(The writer can be reached at mhl@rediffmail.com)
