unorganised retail sector in india

UNORGANIZED RETAIL SECTOR IN INDIA.PRESENTED BY PRAMITA SHARMAARJUN U RDILEEP M MAKHILESH HIREMAT LIVIN P VARGESEMOUMITA GHOSH

P E S I T . BANGALORE.

Indian Retail market at a glance

The contribution of retail industry to India’s GDP is more than 13%.

The retail industry in India is of late often being hailed as one of the sunrise sectors in the economy.

India's retail sector is on its way of modernization. Traditional markets are making way for new formats such as departmental stores, supermarkets and specialty stores.

India's retail sector is estimated to touch US$ 833 billion by 2013 and US$ 1.3 trillion by 2018.

Unorganized Retail sector

The unorganized sector consists of all private enterprise, having less than ten total workers, operating in proprietary or partnership basis.

It takes a majority of Indian food processing market as opposed to the organized sector, which only holds a share of 48%.

Unorganized sector includes low-cost retailing such as the local kirana shops, owner-manned general stores, paan/beedi shops, convenience stores, handcart and pavement vendors

Characteristics of unorganized retail market

The traditional formats of low-cost

retailing

Small-store (kirana) the easiest

ways to generate self-employment

Generally family run business

Purchase from kirana store in

credit

The convenience store for the

customer.

Sectors with high growth potential

Food and Grocery (91 per cent)

Clothing (55 per cent)

Furniture and Fixtures (27 per cent)

Pharmacy (27 per cent)

Durables, Footwear & Leather, Watch & Jewellery (18 per cent).

Indian Consumer Categories

Indian consumers

0 20 40 60 80 100

Very rich

Consuming class

Climbers

Aspirants

Destitutes

million households

2006-07

2001-02

1995-96

Components of Unorganized Retail sector

Share of Organized and Unorganized Retail sector.

85 15

81 19

55 45

40 60

36 64

30 70

20 80

3 97

1 99

0% 20% 40% 60% 80% 100%

USA

TAIWAN

MALASIA

THAILAND

BRAZIL

INDONESIA

CHINA

INDIA

PAKISTAN

ORGANISED

UNORGANISED

Competition with the organized retail sector

It is estimated that over 95% of retail in India is done through the unorganized channel.

But as the disposable income levels have risen, consumers has been a shift towards branded products and the organized retail channel.

The entry of multinational companies is impacting the structure of the retail industry in the country.

There are various extremes of retail outlet with small local kirana stores being located in convenient locations, offering local produce and merchandise and a personalized service.

At the other end of the spectrum there are large hypermarkets offering a range of products, often at a lower price, with a less personalized service.

Contribution to National product and Net Domestic Product

92% of the total workforce in a country were employed in the unorganized sector.

370 million workforce constitute of unorganized sector

Over 60% share as per current price in NDP

Contribute significantly to National Product.

Recent trends

Unorganized to organized

Amplifying cost(rent, labor,

operational)

Deployment of advance

technologies (computer, CC TV

camera, software)

Healthy competition

Change in consumer preference

Advantages

Distance from home Traditional mindset of Indian customer Customer relationship and behavior Bargaining Market size Bada bazaar , particular day market Wholesale market

Some facts

Huge size of market.

Expanding and modernizing

rapidly in line with India’s

economic growth.

Having many number of options to

cut their costs like labor cost,

operational cost etc.

Major contributor of retail industry.

Impact of FDI.,

Unemployment. Less middlemen Competition Change in consumer Focus Free Home Delivery services etc., Technology