this is not aisle 3

15 October 2009 at 13:51 9 comments

By Shereef Zaki, KF9, Perú

One of my first posts was titled ‘recession proof’’ in which I described the resilience of micro-businesses and the integrity of micro-lending. This time around, I want to detail a theme I had only painted with large brushstrokes.

Although EDPYME Alternativa’s borrowers are scattered throughout the region, I live in Chiclayo and it has become the backdrop and the context of my life. To me, one of the most fascinating parts of this small city is the dearth of big box stores. In their absence exists a constant buzz of small-scale commerce.

Let me describe this vibrant economic landscape. In the center of the city, around the main plaza, there is a mixture of restaurants and shops devoted to clothing and electronics (especially cell phones). As one ventures further from the center, the streets become organized by economic themes.


Although that string of stores on Cuglievan is far less efficient than Home Depot, it encourages competition, diversity of selection and keeps more people employed. One of the strangest paradoxes of a modern economy is the contradiction of scale: with efficiency at a large scale less people can do more. Progress becomes self-defeating if people do not have the jobs and incomes to keep on buying from the big box stores!

The hectic flow of social and economic interactions in Chiclayo keeps people interacting with one another, asking for advice and building a community. And on a personal level, it is way more fun to walk through high energy markets and themed streets asking where to find that one little thing than to navigate down the well-marked aisle 3.

*King Kong is the most rich dessert imaginable: a layer of thick caramel, a layer of candied fruit preserves (generally pineapple) and a layer of cake – cut into rectangles, circles or squares

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Shereef Zaki is serving as a Kiva Fellow working with the new field partner EDPYME Alternativa in Chiclayo, Perú

To view currently fundraising loans from EA click here

To become a member of the “Friends of EDPYME Alternativa” lending team click here

Entry filed under: Americas, Countries, KF8 (Kiva Fellows 8th Class), KF9 (Kiva Fellows 9th Class), Peru. Tags: , , , , , , , , , .

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9 Comments

  • 1. Lauren Engel  |  24 October 2009 at 12:47

    Sorry for the jumbled post before. I was trying to type on an iPhone, and it wasn´t working out for me so well. Here´s what I wanted to post…

    This is an interesting topic and one that has perplexed me throughout my travels in Latin America. I am currently living in Arequipa, Peru, and here we have Pharmacy Street, Plastic Street, Cake Street, and if you need wallet-sized photos I know just the place to find about ten salespeople dressed in vests all holding a small book filled with display pictures. In Cartagena, Colombia you’ll find Puesto de los Dulces , a long row of identical white stands where women sell sticky candy from tall glass jars. In Banos, Ecuador, stalls selling sugar cane taffy, sugar cane juice, and sugar cane itself crowd one side of the bus terminal, and along the length of the Plaza in front of the church you’ll find shop upon shop of inflatable plastic animals. For the longest time I convinced myself that it was simply something that, as an outsider, I didn’t understand, a cultural secret that I was not privy to. But after talking with natives about my observations I’ve arrived at the opinion that the only sensible answer is that it just doesn’t make sense.

    I understand what some of the other commentators have mentioned regarding the price competition and taking business from competitors that is commonplace in industrialized nations. They have neglected a crucial difference, however: here, stores tend to sell the exact. same. products. And they sell them at the exact. same. prices. It is not the equivalent of a McDonald’s setting up shop across the street from a Burger King. There, at least, there is variation between the two restaurants. At the heart of it they may both be selling inexpensive, fast burgers and fries and using similar tacics to attract customers, but there is enough difference between the two in terms of taste, atmosphere, advertising, etc. that some people favor one over the other. A Ford dealer may move into a lot next to a Chevy dealer, but one is selling Fords and the other Chevys. Even gas stations, which typically can be found in the same area, and by the nature of their product are limited in how much they can vary, make an effort to distinguish themselves from their competition by the quick-stop shops that accompany them, the condition of their facilities, and perhaps most important, by the signs that advertise their prices, even if it may only be a penny difference from the neighboring station. It’s that penny, published for the world to see, that will attract the customer in search of the cheapest place to fill up his tank.

    In my experience, this is not the case in Latin America. (I have not had the opportunity to visit other parts of the developing world, but I would imagine I’d make similar observations.) Here, rarely do shops make an effort to separate themselves from their competition. In fact, it seems to be exactly the opposite: they copy one another, stealing display ideas, color schemes, and the like until all end up looking the same except for the face behind the counter. The marketing strategies of the First World have not yet found their way to the cobblers who mend shoes in front of the stadium, the women selling silk flower in front of the cemetary gates, or the watch repairmen congregating on the pedestrian walkway. Customers are left to base the decision of where to make their purchase almost exclusively upon convenience. Which brings me to my next point…

    If all of these shops are selling the same things, at the same prices, in the same way, then really how convenient is it for all of them to be located in the same place? The only convenience is that if I need to buy a hammer, I know exactly where I need to go — that is, if I know where Hardware Store Street is. If I’m new to town, chances are I won’t find a place to buy a hammer just by wandering around like I might if they were spread across the city. Without even convenience for the consumer to go on, the chance that a business will be more profitable than its neighbor is based on sheer luck. Of course, I am painting with broad strokes. Certainly not every place is like this, but in my experience, many are.

    In conversations with locals about this, the most common answer I’ve gotten to this great Latin American mystery is the dissatisfying response of jealousy and a lack of creativity. One guy puts up a fruit stand, mandarins stacked high in a pyramid, has some success, and soon enough another guy wants a piece of the pie. And then another. And another, until the pieces of that pie get so small that no one is really gaining anymore. It’s a pessimistic view, perhaps, but it’s the only one that I’ve found to make any sense — ironically, despite the insensibility of it.

  • 2. Lauren Engel  |  24 October 2009 at 10:41

    This is an interesting topic and one that has perplexed me throughout my travels in Latin America. I am currently in Arequipa Peru, and here we have Pharmacy Street, Plastic Street, Cake Street, and if you need wallet-sized photos I know just the place to find about ten salespeople dressed in vests all holding a small book filled with display pictures. In Cartagena, Colombia you’ll find Puesto de los Dulces , a long row of identical white stands where women sell sticky candy from tall glass jars. In Banos, Ecuador, stalls selling sugar cane taffy, sugar cane juice, and sugar cane itself crowd one side of the bus terminal, and along the length of the Plaza in front of the church you’ll find shop upon shop of inflatable plastic animals. For the longest time I convinced myself that it was simply
    something that, as an outsider I didn’t understand, a cultural secret that I was not privy to. But after talking with many natives about my observations I’ve arrived at the opinion that it just doesn’t make sense.

    I understand what some of the other commentators have mentioned regarding the price competition and taking business from competitors that is commonplace in industrialized nations. They have neglected a crucial difference, however: here, stores tend to sell the exact. same. products. And they sell them at the exact. same. prices. It is not the equivalent of a McDonald’s setting up shop across the street from a Burger King. There, there is variation between the two restaurants. At the heart of it they may both be selling inexpensive, fast burgers and fries and using similar tacics to attract customers, but there is enough difference between the two in taste, atmosphere, advertising, etc. that some people favor one over the This is an interesting topic and one that has perplexed me throughout my travels in Latin America. I am currently in Arequipa Peru, and here we have Pharmacy Street, Plastic Street, Cake Street, and if you need wallet-sized photos I know just the place to find about ten salespeople dressed in vests all holding a small book filled with display pictures. In Cartagena, Colombia you’ll find Puesto de los Dulces , a long row of identical white stands where women sell sticky candy from tall glass jars. In Banos, Ecuador, stalls selling sugar cane taffy, sugar cane juice, and sugar cane itself crowd one side of the bus terminal, and along the length of the Plaza in front of the church you’ll find shop upon shop of inflatable plastic animals. For the longest time I convinced myself that it was simply
    something that, as an outsider I didn’t understand, a cultural secret that I was not privy to. But after talking with many natives about my observations I’ve arrived at the opinion that it just doesn’t make sense.

    I understand what some of the other commentators have mentioned regarding the price competition and taking business from competitors that is commonplace in industrialized nations. They have neglected a crucial difference, however: here, stores tend to sell the exact. same. products. And they sell them at the exact. same. prices. It is not the equivalent of a McDonald’s setting up shop across

    other. A Ford dealer may move into a lot next to a Chevy dealer, but one is selling Fords and the other Chevys.

  • 3. Avani  |  19 October 2009 at 13:21

    Shereef –

    Quite interesting – thanks for breaking it down some more. Oh, and bring us some King Kong, when you come back!

  • 4. Howard Zugman  |  18 October 2009 at 03:56

    Hi Shereef,
    Enjoyable post. But having similar stores all in one area does not seem to be unique to third-world operations. Just look at how all of the fast food outlets here in our country (the USA) ‘rat pack’ in the same area. Want to find the nearest location of a McDonalds?? Just look for one of its competitors.

  • 5. Jane  |  16 October 2009 at 21:07

    nice illustrations!

    btw similar businesses who are right next to each other do better than businesses in isolation – that’s what they teach at NYU Stern acc. to my friend that went there…

    has to do with the increased traffic and consumer perception that businesses will price competitively due to their close proximity i think

  • 6. adamkb  |  16 October 2009 at 12:36

    This is a great topic! Practical in some ways, but I usually find it means that shopping takes forever because you feel that you must just check in the next shop along in case they have that fake Shakira CD for a few cents less (not that I’m admitting to being a closet Shakira fan).

    London still has a few streets like this for specialist things – Saville Row and Jermyn St for tailors, some street somewhere where everyone goes to buy (and later pawn) wedding rings…

  • 7. karlbaumgarten  |  16 October 2009 at 11:34

    Great post shareef. Its interesting how stores locate right next to their competition. I think it boils down to a lack of readily available pricing information in the developing world. It would be more practical for consumers to have, say, an electronics store in every neighborhood. But becuase of the lack of available info, they don’t know if they are getting ripped off. Hence, stores locate next to another. What do ya think?

  • 8. robpacker  |  15 October 2009 at 20:28

    It all seems pretty practical to me: who wants to spend hours trekking about town to look for glass when you can find everything all on the same street?
    It reminds me of shops I’ve seen which specialize in two, but very different, items: car tyres and meat, ice cream and American clothes, fake DVDs and detergent.
    Great post, Shereef.

  • 9. Jan & John, KivaFriends  |  15 October 2009 at 16:47

    mmm-mmm King Kong sounds yummy. and I don’t like shopping aisle 3 either :) jan


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