Retail Markets

                               RETAIL Markets

 Retail Markets Scenario in India: Organized vs. Unorganized

Retail industry in India can be classified into two broad categories – organised retail and unorganised retail
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Organised retail  markets – includes retailers who operate their business as a professionally managed commercial entity. They have professionally managers running the business, and maintain proper account books as per standards. Examples of organised retailers include Big Bazaar, Star Bazaar.

Organized retail in India is small, currently estimated to be around 7% of the total retail, however, it is growing much faster compared to unorganised retail.

 
Fig. 1.1: Projected share of organised retail versus unorganised retail during the decade between 2010-11 to 2020-21.
(Source: India Brand Equity Foundation Retail Report (November 2011), Deloitte, Aranca Research)

Unorganised retail  markets –  Unorganised retailing refers to the traditional formats of low-cost retailing. Unorganised retailing refers to retail businesses that are typically run by the owner (or his family) or a caretaker. The management of such retail stores is not a professional function and they lack technical and accounting standardisation.

Conventional Kirana shops, general stores, corner shops among various other small retail outlets are examples of unorganised retailers. They remain the driving force behind India’s retail industry.

The following are some salient points about the retail sector in India:

•  Retail industry, being the fifth largest in the world, is one of the sunrise sectors with huge growth potential and accounts for 14-15% of the country’s GDP. Comprising of organised and unorganised sectors, Indian retail industry is one of the fastest growing industries in India, especially over the last few years.

•  According to the Global Retail Development Index 2012, India ranks fifth among the top 30 emerging markets for retail. The recent announcement by the Indian government with Foreign Direct Investment (FDI) in retail, especially allowing 100% FDI in single brands and multi-brand FDI has created positive sentiments in the retail sector.

•  Indian retail industry is the largest industry in India, with an employment of around 8% and contributing to over 15% of the country's GDP.

•  McKinsey report 'The rise of Indian Consumer Market', estimates that the Indian consumer market is likely to grow four times by 2025.

•  Retail industry in India is expected to rise 25% yearly being driven by strong income growth, changing lifestyles, and favourable demographic patterns.

•  Indian retail industry is one of the fastest growing industries with revenue is increasing at a rate of 5% yearly
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•  India's overall retail sector is expected to rise to US$ 833 billion by 2013 and to US$ 1.3 trillion by 2018, at a compound annual growth rate (CAGR) of 10 per cent

•  A further increase of 7–8% is expected in the industry of retail in India by growth in consumerism in urban areas, rising incomes, and a steep rise in rural consumption.