Samizdata

I am presently in the Kingdom of Jordan. It’s a pleasant place. Developing quite rapidly. Friendly, welcoming people, although with a slight excessive tendency to charge foreigners more than they might charge locals for the same thing. That’s a sign of the stage of development the country presently occupies, however. Those higher prices are still cheap, by the standards most westerners are used to, and it is easy to get away with. Such are the joys of using an alphabet that westerners generally cannot read, too. (This sort of thing happens much more in Thailand than it does in Vietnam, for instance, as the Latin alphabet used by the Vietnamese makes it much harder to get away with. Despite the preponderance of alphabets used in India, it happens far less there, given that every establishment has an English language price list that is used by Indians far more than by westerners).

Amman is a city with quite a lot in common with somewhere like Bangkok, actually, although Bangkok is clearly more developed right now. A huge number of people have arrived in Amman from the countryside in recent decades, boosted by greater economic opportunities in the city than the desert as well as for political regions. Huge, relatively poor neighbourhoods have sprung up in East and South Amman. Crowded, sure. Desperate, not at all. In these neighbourhoods you find clusters of souks and markets and stores devoted to most imaginable products.

The new and rapidly growing middle classes are in West Amman. This is a mixture of highway flyovers, international restaurant and hotel chains (including many American restaurant chains not seen in Europe), shopping malls, and bad driving. It resembles Dubai in some ways, but is much less manic, much less the product of ruthless absolute monarchy and a viscous caste system (the Jordinian royal family being much more moderate) and contains many more pedestrians, even if the road infrastructure does not appear to have been invented with pedestrians in mind. There are various signs that money has entered Amman both from and via the UAE in various ways, but it doesn’t appear to be dominating the place. Plus, the weather is a good deal nicer, which helps a lot.

Go into the nicer shopping malls, and you find many of the expected international tenants that are generally to be found in middle class districts of rapidly developing cities with aspirational middle classes: Starbucks, Zara, etc. Anchoring each mall is a huge supermarket, selling vast amounts of food and non-food items at good prices – devoting roughly 50% of floor space to food and 50% to everything else, an outlet of the French chain Carrefour.

As I usually do in foreign countries like this, I devoted some time to wandering around the aisles of this supermarket. There is no section devoted to alcoholic drinks, this being an Arab country. Jordan is not an especially difficult place to find a beer. There are (fairly expensive due to high taxation) liquor stores throughout the country, mostly operated by members of the sizeable Christian minority, but drinking alcohol is something you separate from good wholesome activities like doing the regular shopping or having dinner in a public place, so there is no alcohol section and most restaurants do not serve alcoholic drinks. More entertaining is the section that would be devoted to things like ham, bacon, and salami in a European country. It is really amazing what you can do with turkey meat if you try, as anyone who has ever been served a halal English breakfast can vouch. And along with the Turkey salami there is the lamb salami beloved of Indian pizza aficionados. The regular meat section is full of lamb and beef, some of it imported from places like Brazil and Australia, and some of it sourced locally. The seafood section contains lots of fish that are described as coming from Dubai. An almost landlocked country is not going to be able to source most of its seafood locally (and, in the modern globalised world, who does, anyway?). The food section in general contains much catering to local tastes, and contains a very impressive mixture of local and imported.

Go into the non-food section and you find cheap TVs, computers, and other electrical appliances of all kinds. Cheap, but not too unsightly clothing in a mixture of western and local styles, kitchen utensils, tools and light kitchen, household and garden stuff. Toys. People familiar with the non-food section of a Carrefour or a Tesco anywhere else will be familiar with the contents here. A larger portion of this is imported, and needs to be less localised than the food, but where local sourcing and catering to local needs and taste is necessary, it is done.

Get a bus or taxi to the poorer neighbourhoods of Amman, and there are more downmarket malls in existence or under construction. These also have Carrefour outlets in them, possibly smaller ones. While Starbucks and Zara don’t necessarily travel all that far down from the upwardly mobile middle classes, supermarkets can. Everyone wants to buy good and inexpensive food, and cheap TVs and mobile phones appeal to all social classes as well. Carrefour have moved into the market by first providing cheap goods to relatively upmarket purchasing power by opening in malls that want them as tenants and with which signing contracts and negotiating bureaucracy is relatively easy, in so doing setting up supply chains and logistical systems in the country, and are now just starting to move out into the mass market.

Carrefour are, i think, the best in the world at general retail in middle income and developing countries. Their two most important competitors in this are Wal-Mart of the US and Tesco of the UK. Carrefour resembles Tesco more than it does Wal-Mart. Both Carrefour and Tesco began as food retailers, and as supply chain management became more and more important became better and better at it. Both were very good at negotiating the vagaries of their local planning laws and local labour laws, and expanded domestically to a huge extent as a consequence of this. Both added more and more non-food items as they opened larger and larger stores, to the extent that they became general retailers rather than simply food retailers. (The French use the word hypermarché or possibly the pseudo-Anglicism hypermarket to describe a large store that sells both food and non-food under the same roof. The English stick with supermarket regardless of how big it gets. As well as opening larger stores, they also opened smaller stores, becoming masters of everything from small convenience stores to giant mega markets (some of which do not even sell food). Using economies of scale to run both very small convenience stores and very large megamarkets at the same time was a relatively new thing, and both companies got this relatively early. Both took advantage of the new markets that opened up in Eastern Europe after 1989.

Wal-Mart on the other hand came from general non-food retail and added food later. → Continue reading: Urban development in Jordan and the power of French hypermarkets (but not French politicians)