Take a walkathon with us in the Lohar Chawl that has reportedly not been doing good especially after the advent of LEDs, and needs immediate government support.
Lohar Chawl is a wholesale market for electronic goods and related raw materials used in making day to day electronic products required at home and businesses. Located in the Marine Lines of the country’s financial capital, the market also boasts of its lighting varieties, especially the decorative ones.
Majority of shops are in wholesale trade, nonetheless, there also exist a good number of retailers in this market selling all types of electrical goods, wires & cables, inverters, lighting products, LED lights, hand tools, power tools, hardware, etc. One can find small to large stores selling these items.
Before we go further on the attributes of the market, let’s understand what the term Lohar Chawl stands for. Lohar is someone engaged in Iron Business and Chawl is a residential space or a building with separate tenements. However, with passage of time, the core business (Iron related) got depleted and just the name remains, like other gully and lane names in Mumbai.
The high point is that this decades-old multi-lane market still has residential spaces in major old duplex building and is going strong. Those little windows, from which we could see old Parsis looking out inside the trading area, gives a different feel to the market. While the ground level of this combined residential and commercial space has major retail and wholesale shops, the residential are all above it.
We at LED World took a tour to know how lighting traders are fairing in this highly crowded market. We tried meeting quite a few of the wholesalers/traders, but couldn’t succeed as most of them seem busy with their respective customers who were seen stepping in intermittently, if not so regular.
There are certain lighting stores that sell only products of a particular brand, while there are some that deal in a single product of various brands & make. Of all the available varieties, we were interested in lighting products including chandeliers & fancy lights for decoration – both Indian and imported.
The survey brought out interesting outcome following a variety of responses except for one which stands common. They unanimously agreed that the advent of LEDs has attracted many new traders, which in turn has enhanced the competition and cut down the margins substantially. Point to be noted is that whomsoever we got connected with has been in the market for decades. They have seen the ups & downs that the market has been passing through all these years. The feedback is here as follows:
“Those golden days have gone by when traders here were hardly getting time even for tea. That was the era when customers from across the country kept pouring in with their varied requirements, and we were busy catering to their specific needs. We used to have lunch in the evening hours after the customers leave with their stuff,” said Chetan of Liberty Lights.
He informed that the shop that he is employed with is basically dealing in residential lighting, especially fancy ones. “The market, however, is flooded with both Indian as well as imported stuff and the customers from across the country keep visiting from time to time with their varied requirements. For us, most of the customers are individuals, and hence, come with their specific needs to match with their respective interiors.”
“Competition is very high nowadays as quite a few traders are selling lighting products. It was pretty different a decade ago when the lighting shops were only a few, say, up to 10. It was then a very good trade and considerable profit margins were there. This attracted many eyeballs and seemed lucrative from far. Accordingly, new faces keep entering and trying their luck,” he elaborated.
As far as trend is concerned, nothing much has changed except for LEDs replacing conventional lighting. “Some people also ask for LED filament bulbs, which we offer on demand because they are costly. For fancy lights, there’s no concept of getting outdated. Some customers specifically come for antiques, some for contemporary, and some for moderate ones. All the types of lights are equally important,” he divulged adding that the ups and downs are a regular feature of any market and no season can be attributed for the same.
Shripal Jain of Alladin Dhanji & Co. seemed a little disappointed with the contemporary phase that Lohar Chawl is passing through. “The market is going through its worst phase because the number of sellers has been on continuous surge, while the number of buyers is either same of decreasing with each passing day. I don’t know what is so lucrative here for traders that are getting attracted without fail. New faces keep coming on regular basis; however, they don’t stay for long and leave the place before even completing a year,” he lamented adding that they aren’t actually making anything out of their investment here, but ruining our trade.
“Earlier, only a few traders, like five or seven, used to be importers. Nowadays, out of 200 traders, 150 are importers and are bringing the same stuff. This has not only blocked the way for wholesalers, but also the varieties have got depleted. Lighting products that we are dealing in have become more or less common. Most of the shops have same kind of products. Sometime even the designs are same because the sourcing destination is the same for all the traders,” he tried becoming a little elaborative.
Recalling those old days, he said, “When I came here, there were only 12 shops in this area. As I mentioned there were only a few who used to bring imported stuff. Apart from that, quite a few sellers from Delhi used to visit Lohar Chawl, 3-4 times every year bringing a variety of Indian manufactured lighting products with considerable demand. In last 3-4 years, the scheme of things has seemingly got catapulted. This is mainly because the financial crunch has hit the market badly owing to demonetisation.”
“The customers in those old days used to come here with their own specific requirements and we had to offer them accordingly. Those old days were specifically provocative to the Indian manufacturers. Following the demand of customers; they used to create something new each time. Now the scenario is pretty different as most of the traders prefer to buy the stuff from China, the nearest and the cheapest sourcing hub for all of us. Unless the Chinese stuff is banned, we can neither excel our manufacturing, nor the markets,” he shared.
He further added that the grief-stricken real estate is also adversely affecting the lighting trade. “Around 20 lakh flats are awaiting their occupants, who are reluctant to do so because of the liquidity crunch. Even the renters are not available as job market is not so rich. In totality, the market for us has been passing through rough patches and need certain corrective measures immediately to get rectified.”
Going forward, we met Umesh Gupta from Deepam – one of the oldest lighting stores in the area. “We are here since last three decades, but the scenario has changed dramatically in the recent past. Especially in the last 4-5 years, the market has lost its sheen. It has become considerably slow,” he said adding that market like this is very much prone to cash transactions, while people’s cash got deposited in the banks following a drive from the Centre. “And when you purchase using cards & cheques, you restrict yourself from spending much. You automatically become conscious.”
“Believe us, we had a golden phase. But with LEDs entering the lighting arena, every Tom, Dick & Harry has become the lighting knowers-turned traders. They are doing nothing good to themselves, but ruining our existing market. And for all this the credit goes to China which has become the cheapest sourcing destination for all the lighting traders, not only of Mumbai but across the country. There was a time when panel light was introduced at Rs. 2100, which is now available at Rs. 300 with no lasting impression. This type of incident is further deteriorating the scene,” he shared his concerns.
He feels that the buyers’ mind has also changed. “Nowadays, they don’t want products which at one time were purchased for their aesthetic appeal, long lasting features, and more so, because of their perfect match with the interiors. Margins have come down drastically. It has now transformed to become a buyers’ market unlike earlier when it was a sellers’ space. The buyers are now flooded with varieties to choose from, and are inclined to go for cheaper products with option to replace the same in just a couple of years, he said adding that earlier the scene was different as lighting had been fixed for not less than a decade or even more.
When asked about the changes with the advent of LEDs, he specifically mentioned that especially the incandescent is missed as the crystals used in chandeliers don’t shine with LEDs. “Otherwise, only the source has changed, rest of the fittings keep evolving with time and new designs keep coming in on regular basis,” he said.
The next in our list was Bhavesh Gada of Glitteria Premium – the store is owned by Manish Shah who has been in this market for more than five decades. “The market here is very slow for now. This can be attributed to the financial year-end. After May, we expect the roll back of trade. We get customers from all across the country. However, with rapid increase noted in the number of sellers, the competition has certainly surged and has made it tough to survive for long, especially to the newcomers. It also depends on what you have on offer. If someone has been maintaining good variety and high-quality, definitely he will be able to fetch good business out here,” Gada opined.
According to him, there’s no specific one but all types of lighting products have been able to generate the demand. “However, modern lighting products like LED filament is getting more attention from today’s customers, especially the young ones who love to go with the wind and want to remain in the league of first buyers. On the other hand, in the decorative lighting segment, the trend keeps changing every couple of months and therefore nothing stands static.”
On responding to Indian vs imported, he said, “We offer both, for example, the one with brass fittings are wholly manufactured in India and is bringing good business to us. This is because most Chinese fittings come in iron and they get rusted very soon. Unlike that, our India-made brass fittings stay for long with the same sheen that these are manufactured with.”
“As far as bulbs are concerned, incandescent are still in demand owing to their unique features of distributive illumination. Especially, when it comes to crystal chandeliers, LEDs are not the appropriate light source. However, the time has changed and people have become more inclined towards power saving LEDs. That forces us to keep more of LEDs than the conventional sources,” he tried explaining how the behavioural change in the customers is impacting the trade in Lohar Chawl.
The last trader we met put a condition that he doesn’t want to be featured. However, on our request, he gave his nod for publishing his views anonymously. The discussion we had with him gave a true picture of the market scenario, and we didn’t want to drop those thoughts from our report.
According to him the market has transformed from bad to worse owing to it becoming terribly competitive. “The reason is only one that ever since LED has come, the market has changed completely and the whole business has got a face-over in last 8-10 years. In fact, it made us switch over our profile from being a manufacturer and importer to a seller of a particular brand. The system of parallel business is very strong here, and the one with a profile like ours, can’t compete with them,” he said.
Even within lighting, we can find many brands transforming and leveraging on their long standing in the market. “Brands like Luminous and Eveready, both from different streams i.e. inverter and battery, with their respective strongholds, have entered full-fledged to capture their bit of chunk from lighting industry. Thus the number of players has increased multi-fold, while the number of customers are not increasing in the same proportion. This has raised the bar of competition to such an extent that most of the LED people are internally bleeding because the prices have come down drastically leaving almost all the players without any visible profit margin,” he elaborated.
It is pretty obvious that the lighting market is very much dependent on real estate – be it residential or commercial. “But for now, since the real estate has lost its track, it has become tough for us to even survive. Most of the projects are stalled all across the country, irrespective of cities. Moreover, introduction of online marketing of lighting products has further deepened the dent, which has ultimately wiped out the role of middle men like us. Customers come here, ask for a model, take a test of it, and then start comparing the prices with the one, available online, which can not be justified.”
He expressed his concerns when he said, “This is high time now. The government should ban China completely as it is not only destroying our country by fighting across the border, but also destroying our industry by feeding with cheap products of substandard quality. Moreover, manufacturing capability and efficiency is also getting blocked. The Chinese have gone beyond the trade ethics. If you believe, they are offering their products in bulk with under invoicing, to which most of Indian importers think that they are benefitting. But in reality, Chinese are dumping their cheap products and ruining our manufacturing as well as markets.”
He insisted that Indian market is so big. “We can revive our manufacturing base. We have the potential not only now but for decades in future. The growth factors are yet to reach interiors. So, the scope is always there, but our will power has got devastated owing to the easy availability of the products that too at a far cheaper pricing. In fact, we are at fault because of being very much price sensitive. Despite having the affordability, we do not bother as what harm these cheap products may bring to us. In all, it’s a tough time for us.”
“Though, the government programs like DELP and SLNP has added to the manufacturing strength, these fancy lights that the traders here are dealing in didn’t get that kind of attention from the government. This is because these lights can’t be sold in the same manner as bulbs and tube lights. Still, we look forward to brighter days for our lighting,” he summed up.
Being a wholesale market, Lohar Chawl is visited by various small and big retailers not only from Mumbai, but from across the county. The retailers, who earlier used to purchase lighting or electronic products in bulk from this market, now prefer to visit China and grab the same at far more discounted rates. This is not a good sign at all as we are loosing our command over manufacturing and becoming highly dependent on China even for the components that we use in assembling of the products. And this stands true for all the industries, irrespective of product categories. The government must come forward and take corrective measures with immediate effect, before it’s too late.