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The retail industry in India is
dominated by small shops
comprising of local kirana shops, owner-managed
general stores, small footwear shops, apparel shops, paan-beeda shacks,
hawkers and so on. It is estimated that there are 12 million retail outlets in
India and only a small fraction among them are run along professional
lines and can be considered in the category of organized retail.
According to a study conducted by Mathew J et
al (2008), about 96% of retail
sales in India happen through unorganized retail outlets. Organized retail
enjoys only 4% of the total business. However, organized retail is growing at
a fast pace of 11% per annum, thereby leading to progressively
increased share in the total retail pie.
There are plenty of reasons for the growth of organized retailing
in India. These include: rapid urbanization, increasing household
incomes, increasing number of double income families with both the
husband and wife working, entry of multinationals into the Indian
market and increased exposure of Indians to developed economies
both through media and personal travel. Increased presence of
organized retailing is bound to bring in more professional practices
into the Indian retail industry.
It is very clear that retailing practices are going through a
transition period. Many giant international retailers are coming into
India through franchisee or joint venture routes as in the case of Wal-Mart,
7 Eleven and McDonald's. Several Indian firms like Pantaloon Retail,
Reliance, Aditya Birla Group and Vishal have also got into
organized retailing. In such an environment where things are changing very
fast, small and mid-sized retailers are feeling that retailing is
becoming quite technical and tough day-by-day. They are also realizing the
necessity to adopt various professional methods, lest they may be driven
out of business. |
