Out in the open

Listed as a notorious IT destination, Nehru Place in Delhi is a microcosm of multiple economies. Business runs into crores and deals are struck in a matter of minutes. Veenu Sandhu spends a day in the bustling market.

The queues outside the ATMs here are long. Though banks have put up nearly 20 ATMs in the business centre, several run out of cash every few hours. With almost 250,000 people stepping in and out of here during the course of a single day and transacting business worth up to Rs 30 crore, or perhaps even more, an ATM running dry is just a small part of the very large picture that is Nehru Place — Asia’s biggest and busiest IT market that likes to do business in cash. Once home to bigwigs like Ranbaxy and Apollo Tyres, Nehru Place now resembles a commercial slum. This is where the IT supply chain ends: hardware and, more notoriously, largely pirated software. Last month, the US Trade Representative listed the market among the 30 most notorious IT destinations of the world.

A low hum of “software, software, software….” follows you around as you walk in Nehru Place. Scores of teenaged boys have been trained to entice first-timers to the market. One of them is Sunny. That, he later reveals, is only a trade name, a fake identity which he dons to sell his fake or pirated ware. He travels every day with several other boys from nearby Govindpuri to work for “the bigger players”, and gets paid modest “wages” of Rs 250 a day. His work hours are 11 am to 7 pm, all seven days of the week. He carries a photocopied list of more than 600 programs. With his multiple abilities — a salesman who can close a deal in two minutes, a demo expert and a hunted criminal with his antenna up for a police raid party — Sunny manages to sell up to Rs 2,000 worth of software on an average day. When a “jungle call” sounds a warning that a policeman is around, he scoots and then beckons you from a distance.

The original latest edition of Microsoft Windows 7 Ultimate would cost Rs 12,500 (including VAT) at a store a few yards away, and is available at the Microsoft India website at a discounted price of Rs 11,490. Sunny sells the pirated version for Rs 100. For the pirated animation software Maya 2011, which costs Rs 38,000, he charges Rs 500. He says the most expensive software he has is a Rs 9-crore ERP and offers to sell it for Rs 7,000. He also claims to know the 25-character Windows XP master key by heart and promptly writes it down on a piece of paper. It’s been only three months that he’s been coming to Nehru Place and he already knows all about software. “This is my business, I better learn it fast,” he declares. But he knows that he’ll have to opt out of this business at a second’s notice — once he becomes a familiar face in the area, and a risk to his masters, he will be replaced by another lad.

Sunny is just a small cog of the Nehru Place economy. But people like him, and the others dealing in counterfeit products and recycled computer parts, are causing a big dent in the business of genuine players. Step into BPB Multimedia, which has been around for 20 years and sells various kinds of original software and hardware at Nehru Place, and you realise the damage Sunny and others have caused. The buzz of the market place is missing inside this store which has various software, keyboards and computer guide books neatly stacked on shelves. The store is big, but there’s hardly any customer. The corridor outside is also empty, which is unusual for the market where you have to jostle for space with customers, hawkers and touts. “We complained to the police some months ago and got the software pirates removed from outside our shop,” says Sachin Gupta, the store’s manager. “But we continue to lose 60-70 per cent of customers because of piracy.”

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“Nehru Place has over 10,000 shops and offices. Of these, about 3,000 are shops half of which sell IT-related products and software,” says Swarn Singh, secretary of the Nehru Place Improvement and Welfare Association. All the big brands are here: HCL, Hewlett Packard, Dell, Canon et al. They are all located in big showrooms on the ground floor. But the real business is carried out in the smaller shops on the first floor. For every computer component, these shopkeepers rattle out multiple options, mostly from Taiwan or China. In this wholesale computer market, customers can be seen bargaining aggressively as they would in a fish market. Deals are stuck fast, but bills are seldom demanded or handed out. If you insist, all that the shopkeeper will give is a quickly scribbled receipt from a cheap diary with a stamp that says, “No return. No exchange. No refund. Warranty only by company service centre (not by us).” Credit cards aren’t encouraged.

Young, energetic “salesmen” tuned to pick up key words prowl the corridors. Mention the word “assemble” and six of them will immediately surround you and direct you to shops that will put together a “brand new computer” with components of your choice. The end result is that the customer manages to save 18 to 20 per cent on a machine. If one component goes kaput, they have others to replace it.

The concept of the Indian jugaad works to the hilt here. Global management experts have in the past gone to the extent of saying that jugaad is a big factor behind India’s rapid economic growth. But in this case it has not helped the industry. “On top of that, in India, we don’t have the standards to ensure that products of the right quality are imported,” says Sabyasachi Patra, executive director, Manufacturers’ Association for Information Technology. “End-of-life material from countries like China and Taiwan is flooding the market.”

Recycle, reuse; these words take on a new meaning at Nehru Place. Nothing is wasted. Neither used cartridges, nor mother boards, keyboards or LCD screens — nothing. Hawkers (there are more than 600 of them spread across the market, though only 114 are authorised) eagerly fill old cartridges, laser or inkjet, for Rs 100 to Rs 250 in a matter of minutes. They are armed with syringes of various sizes for the job. “A new cartridge costs between Rs 375 and Rs 12,000. These people keep refilling old cartridges repeatedly,” rues Anoop Kumar of Modcare Enterprises which deals in computer consumables and peripherals.

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At the New Vishal Corner, an eatery which has witnessed the changes in the market for over 20 years, Goldy Gupta is busy serving chole bhature, gulab jamun and gaajar ka halwa to people. Business, Gupta says, is brisk. Big halwai stores opened here but had to shut shop, he adds. That’s because the moving population that forms the life of Nehru Place does not have the time to sit down to eat. It wants its meals on the move. So, shops like New Vishal Corner, Sona Sweets and Restaurants and the various snack junctions that offer South Indian, continental and Chinese fare have survived the changes. There are no chairs or tables at Gupta’s store. Meals are served and finished in a matter of minutes. Others, like the once famous Super Snack is today Super Computer. Sitting in his shop, Gulshan Malhota of Super Computer says back in the late 1970s, when Nehru Place came up as Kalkaji District Centre, he and his brother, Ramesh, set up a garment shop here. Then, when government and private offices opened up, they converted it into an eatery. “And one-and-a-half years ago, when the doctor said the smoke in the shop had affected my brother’s health, we closed Super Snacks and opened Super Computer,” he says. The profit margins are small, he adds, but the volumes more than make up for it.

Piracy and counterfeit products are, however, cutting into those profits. The menace has prompted several IT giants to take matters into their hand. “We take soft or hard action against our channel partners (the final frontier that deals directly with customers) depending on the extent of the crime,” says Sumeet Khanna, director of Microsoft India’s Genuine Software Initiative. Routine checks are conducted with decoy customers. Action includes a warning or penalty in terms of rebate or incentives. In September 2011, on Microsoft’s complaint, the Delhi police raided Nehru Place and arrested two resellers. Policemen now constantly prowl the area; recently a police post was set up in the market. But piracy thrives right under their nose. Adobe Systems wants to counter it by moving a lot of its business on the cloud. Others, like HP, have put together an anti-counterfeit team.

Sitting with his makeshift cartridge refill stall with his mobile number written behind him, Vinay is not too worried about these developments. Neither is Amit as he tries to attract customers with his call of “software, software, software.” “In a country where 64 out of 100 software sold are pirated, containing the menace is a slow, long-drawn process,” says Lizum Mishra, director of Business Software Alliance, which represents over a hundred computer companies, including Microsoft. And places like Nehru Place are a bustling reminder of the challenges staring the IT industry in the face.