Traditionally, Indian retail can be traced back to weekly markets, melas and village fairs in the rural areas to kirana stores, public distribution outlets, khadi bhandars and cooperative stores in the urban areas. However, big format organized retail stores are expected to garner about 16-18% of the total retail market in the next five years. Due to the growth of organized retail outlets, the unorganized retailers are prompted to change their method of operation. This article describes and analyzes the new emerging face of unorganized retailers, and the strategies employed by them to meet the emerging competition.

Retailing is a traditional form of exchange process practiced in India right from the days of the barter system. It is a process by which the title of a product (or service) is transferred by an individual, group or organization to the ultimate consumers in the required assortment form, in the right quantities, and at the time of requirement, which in turn satisfies consumption needs. The retailers buy the products from the manufacturers or wholesalers in bulk, and redistribute them to the ultimate consumers in small lots.

Retailing is one of the most fragmented economic sectors in India, next only to the agricultural sector. It accounts for about 10% of the total employment and contributes 8% to the country's GDP. Growth in retail sales is also linked to growth in GDP and private consumption expenditure (Exhibit 1). The Exhibit also shows that India's real GDP, real private consumption and retail sales increased more rapidly during the period 2003-07 compared to the period 2000-03. This was due to increased incomes, positive consumer outlook and buoyant market condition. This situation also prompted many organized retailers, both domestic and multinational, to either launch or step up their businesses, as it was perceived that India offered tremendous scope for the growth of retail in general, and for organized retail in particular.

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