Chapter 7. India's Mighty Microeconomy

With fewer than 1 percent of Indians living the high-paid services dream, building a big consumer company in India isn't easy. How do you reach a fragmented, poor market? Think small and talk to someone like Lakhan Lal.

It's not hard to find him—or hundreds of thousands like him—throughout India. He's everywhere from the busy street corner in the largest city to the side of the road in the most remote village. A guy like Lal sells the most in those grungy urban neighborhoods that Indians describe as places where "you can't tell if the sewer drain is in the street or the street is in the sewer drain."

Lal is a man of few words, which may have something to do with the constant flow of traffic coming in and out of his shop. It would need a revolving door if it had a door at all. As is, the shop's facade is either wide open for business or locked tight by a pull-down garage door. That door protects a mini-empire. In a working-class Delhi neighborhood where migrant workers earn less than 3,000 rupees a month doing everything from delivering food to building the new airport, Lal's tiny shop has huge traffic. And all those people come there every day to buy tiny things: mobile airtime by the second, one pill, a day's worth of shampoo.

Some of the things Lal sells, like mobile minutes, require a passport photo in India, nevermind that most Indians never leave their cities, much less the country. No problem: Lal has a blue backdrop on the wall and a digital ...

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