Last sunday, I was wandering through a rythu bazaar – “farmer’s markets” where farmers directly sell their produce to consumers and eliminate middlemen – set up by Chandrababu Naidu as part of his drive to, like, totally neglect farmers and focus on the IT industry.

As designed, the market had a broad corridor for the buyers to walk through, with granite-floored galas for the sellers to sit. But every single one of the sellers had abandoned those galas and were sitting on the corridors, getting in the shoppers’ way. The actual galas were badly underutilized. They were being used for storage, but not very efficiently. If the sellers had wanted, they could have used it for both.

I thought that this was a perverse result, which had occurred as a result of the fallacy of composition. One seller must have found that he could get a share of the customer’s attention by moving to the corridor and squatting there. Competition must have forced the others to follow. The result was that no seller was better off, but the buyers were worse off, because the shopping experience had worsened. The solution to this problem, I thought like any good free market fundamentalist, was to have marketplaces compete in giving a better experience to customers. I was like totally going to blog it, but didn’t find the time.

It was a good thing I waited, because Prashant Kothari sent me a link to an article in the Wall Street Journal that tells me that this is actually what the customers prefer.

Mr. Biyani redesigned his stores to make them messier, noisier and more cramped. “The shouting, the untidiness, the chaos is part of the design,” he says, as he surveys his Mumbai store where he just spent around $50,000 to replace long, wide aisles with narrow, crooked ones: “Making it chaotic is not easy.”

Even the dirty, black-spotted onions serve a function. For the average Indian, dusty and dirty produce means fresh from the farm, he says. Indian shoppers also love to bargain. Mr. Biyani doesn’t allow haggling, but having damaged as well as good quality produce in the same box gives customers a chance to choose and think they are getting a better deal. “They should get a sense of victory,” he says.

…

Instead of long aisles and tall shelves, the stores cluster products in bins and on low shelves. With long aisles, he says, “the customers never stopped. They kept on walking on and on so we had to create blockages
The bins let customers handle products from different sides. Decades of shopping from stalls also means that most customers feel more comfortable looking down when they shop, he says. Narrow, winding aisles create small traffic jams that make people stop and look at products. Last month, one of his first stores in Mumbai changed from long, straight aisles to the haphazard cluster design. “Sales are up 30% since the change,” Mr. Biyani said, as he struggled to walk through the knots of shoppers at the store.

Indian consumers aren’t used to processed and packaged goods, so the stores sell wheat, rice, lentils and other products out of large buckets. Housewives want to grab handfuls, checking them out for pebbles, quality and smell, he says. Mr. Biyani tells his staff not to tidy up, as he noticed that customers are less likely to check out a product if it is in neat stacks. He scoops up a handful of plastic razors from a pile in a bin. “When it is like this,” he says, “it feels like a good deal.”

(Link might stay good only for a week.)