EFFECT OF ORGANIZED RETAIL ON UNORGANIZED RETAIL: Introduction

Introduction

India started its Retail Journey since ancient time. In Ancient India there was a concept of weekly HAAT, where all the buyers & sellers gather in a big market for bartering. It takes a pretty long times to & step to shape the modern retail. In between these two concepts (i.e. between ancient retail concept & the modern one there exist modern kirana/ mom and pop shops or Baniya ki Dukan. Still it is predominating in India So the Indian retail industry is divided into two sectors- organized and unorganized. The Indian retail industry is now beginning to evolve transformation that has swept other large economies. There is a vast change in Indian retail, the liberalization of the consumer goods industry initiated in the mid-80’s and accelerated through the 90’s has begun to impact the structure and conduct of the retail industry.The concept retail, which includes the shopkeeper to customer interaction, has taken many forms and dimensions, from the traditional retail outlet and street local market shops to upscale multi brand outlets, especially stores or departmental stores.

Hence, focusing on two aspects of retail marketing i.e. Store Retailing and Non store Retailing. Store Retailing as the departmental store, which is a store or multi brand outlet, offering an array of products in various categories under one roof, trying to cater to not one or two but many segments of the society and Non store retailing as the direct selling, direct marketing, automatic vending. Education

The most important debate concerning the implications for the expansion of the organized retailing in India revolves around whether it is going to have positive impacts on the economy as a whole as compared to the traditional unorganized form of retailing. According to one camp, it has overall positive impacts in terms of generating more number of employments, new diversified forms of employments, and improving the nature of retail employment(higher salary, more job benefits, security of job, employability etc). This form of retail sector is also looked upon as a huge sector having immense business opportunities for entrepreneurs and capital investors. Moreover, organized retailing is considered to be efficient and apt to cater to the diversified and changing nature of the consumer demands in growing economies like India. The general benefits of organized retail also include improved supply-chain, improved marketability of farmer’s produce and it is also expected that it will contribute to heightened economic activity. The extensive research brought me to conclude that departmental stores are soon emerging on the top priority lists, amongst the shopping spree in Delhi, as they seem to derive immense pleasure as shopping is considered as a experience now rather than a task and exposure to variety under one roof in their extremely busy lives, when they don’t have time for things.

The organized retail food and grocery stores make constant efforts to induce customers to visit the store by discount offers. Most of these stores believe in creating not just a marketing activity with its customers, but rather favor relationship building with him so as to convert first time customers into a client. They provide better parking facilities to customers and the facility to examine the product. They also offer a wide range of payment options to customers.

India is currently the twelth largest consumer market in the world. According to a study by McKinsey Global Institute, India is likely to join the premier league of the world’s consumer markets by 2025 improving its position to the fifth. But this growth is not going to happen is smooth way. Any change always comes up with some friction and Indian retail sector is and will be witnessing the same friction. Indian retail sector is still in its nascent form if we consider its full potential. While most of the developed market of US and Europe and also some SE Asian emerging market economies have reaped the benefits of modern retail, India has not yet entered into advanced phase of modern retail forms. Unorganized retailing, on the other hand, refers to the traditional formats of low-cost retailing, for example, hand cart and payment vendors, & mobile vendors, the local kirana shops, owner manned general stores, paan/beedi shops, convenience stores, hardware shop at the corner of your street selling everything from bathroom fittings to paints and small construction tools; or the slightly more organized medical store and a host of other small retail businesses in apparel, electronics, food etc. Small-store retailing has been one of the easiest ways to generate self-employment, as it requires limited investment in land, capital and labor. It is generally family run business, lack of standardization and the retailers who are running this store they are lacking of education, experience and exposure. This is one of the reason why productivity of this sector is approximately 4% that of the U.S. retail industry. Unorganized retail sector is still predominating over organized sector in India, unorganized retail sector constituting 98% (twelve million) of total trade, while organized trade accounts only for 2%.

The road side hawkers and the mobile (pushcart variety) retailers.

The kirana stores (the Indian equivalent of the mom-and-pop stores of the US), within which are: Open format more organized outlets Small to medium food retail outlets.

Modern trade or organized retailers Within modern trade, we have:

The discounter (Subhiksha, Apna Bazaar, Margin Free)

The value -for- money store (Nilgiris)

The experience shop (Foodworld, Trinethra)

The home delivery (Fabmart)Tug of war:

Organized vs. Unorganized Sector

Future of retail sector in India is swerving- on one side organized retail is marching into life of urban consumers, while on the other our own neighborhood ‘kirana stores’ are resisting fiercely with their existing strong foothold. India today is at the crossroads with regard to the retail sector. A shift between organized and unorganized retail sector is evident, which has led to a number of speculations on the fate of Indian retail.Unorganized sector cannot ignored.

In any newspaper or television channel, we find hordes of news about happening in organized retail sectors, which is indeed fairly real situation. While the role of organized retail sector in growth of economy cannot be denied, but one thing is also of extreme importance that unorganized retail format is a support to a large chunk of population- providing direct employment to 39,500,000 individuals. So there is no way that government or anyone can discount these foundation stone of Indian economy.