Gaming the Periamet leather market
- Shruti Sundar Ray
- Nov 29, 2019
- 3 min read
Despite competition, leather merchandise stores cluster at Chennai's Periamet due to the recognition that the market brings

“Why shouldn’t the market be here?” asks Rahed, who works at a leather goods store called ‘Force 313’ in Wuthu Cattan Street at Periamet, with much indignance in his tone. He is responding to an innocuous enquiry as to how a thriving leather market came to be located in a single stretch of Periamet.
Periamet, a residential and commercial locality near Chennai Central railway station, houses an over-100-year-old market for leather products. Periamet is not just the oldest hub for leather trade in Chennai but, reportedly, also the only one. Exclusive leather goods stores are hard to find in other parts of the city, even in large markets such as those at Triplicane, Royapettah or at Parry’s, Sowcarpet.
In contrast, the unassuming, two-lane Vepery High Road in Periamet is lined with retail shops—large and small—selling shoes, bags, wallets, belts made from different kinds of tanned leather—sheep-skin, goat-skin, buffalo-skin, cow-skin. The adjoining streets, branching out of the main road on both sides, reveal even more shops selling almost-identical merchandise.
This clustering of leather traders in Periamet begs the question of why. Why do new traders decide to set up shop in Periamet where leather stores already abound? Wouldn’t they prefer to open stores in new markets where they would contend with less competition?
The response to the last question is a resounding ‘no’. “This is the market. All the shops will come here,” maintains Rahed. At the heart of his simplification is the recognition with customers that a known location brings. Stores—new and old—benefit from this visibility, which drives customer flows and thus, profitability.
The clustering phenomenon, which is observed across markets, cities and even countries, can be explained by Hotelling’s Model of Spatial Competition. Each business wants to be located at the same strategic spot that maximises its customers. Since every business has the same mindset, they come up at the same location, creating clusters.
Periamet is the hub of leather trade in the region despite being over three hours away from the nearest leather manufacturing units and tanneries in Ambur. Yasser, the proprietor of Zia Expo Shoes, explains the rationale. “The market first opened here, over a century ago, because it was close to the port and to Chennai Central. This made transport easy. Now, even with other transport options, the market has continued in the same place because it is famous.”
The association with a specific trade or industry can be so strong that in some cases, the area becomes almost synonymous with the product. “Periamet means leather, leather means Periamet,” says Altaf Ahmed of ‘RK Leathers’ in Periamet, puffing up with a smile.
This name-based word-of-mouth visibility has driven the commercial success of Periamet as a leather hub, which attracts as customers not only locals but also tourists. ‘Dollor & Peso’ is one such store in Periamet whose merchandise caters to tourists, especially those from outside the country.
Perched at different heights and visible through the glass storefront of ‘Dollor & Peso’ are a variety of fur-lined boots and hiking shoes, in leather, which would not be of practical use in Chennai’s weather. Upon entering the store, one is greeted with the peculiar-but-not-unpleasant smell, unique to leather stores and the sight of tanned leather in shades of black, brown, red, blue and green, in every conceivable direction. Leather jackets in many sizes and designs can be found on hangers lined up on a sliding rack to the left while the shelves on the right display different designs of formal leather shoes. The store manager makes it a point to confirm whether the shoes intend to be worn in India or abroad before presenting the appropriate shoe options to a customer.
The presence of a large market in a single place provides opportunities to traders, that far outweigh the disadvantages from competition. Since the businesses at Periamet are in a Nash Equilibrium when it comes to their location, a hypothetical state in Game Theory wherein none of the parties involved benefit from changing their common strategy, there is no incentive in changing their location and moving away from the market. Instead, the shop-owners focus on other marketing strategies such as differentiation of goods to manage the competition.
At Periamet, some stores are known for the quality of their materials and craftsmanship, while others are preferred for their affordability, some cater to foreign tourists while some have a better collection of products for women. Altaf Ahmed says, “Everyone has a specialization that competitors don’t have. That’s how the business goes on.”
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