Coke, Pepsi & the Indian Heartland

December 2004. We were traveling in India. As we waited for our train at a small railway station in Bolpur, a small town near Calcutta, we watched a boy of 10 or 12 arrange his merchandise in preparation for boarding the train to Calcutta. He stacked up hundreds of packets of chips, cookies, and snacks from various multi-national brands in a basket.

I asked him how much he buys the merchandise for. He said, Rs. 9 (20 cents). And sells for Rs. 12. Looks like a 25% gross margin business. He sells about 200 of these packets on the train back and forth, makes a gross profit of Rs. 600 ($12) a day.

This kid is an unbelievably successful micro-entrepreneur, and does not belong in our 4 Billion consumers in question. However, he exemplifies one of those 4 Billion consumers who has managed to lift himself out of the hole.

More interestingly, he is a representative of the distribution channel of the major MNC brands like Pepsi, Coke, and many others. This boy of 12 is one of the thousands that are essential for the Coca Cola’s of the world to penetrate the heart of India, China, Africa, and Latin America.

So. Does Coca Cola have a program to offer financing (and training) to micro-entrepreneurs like our micro-hero?