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    What Lies in Store For The Retailing Industry in India

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    Ashutosh Singhal
    India has the highest number of retail outlets per capita in the world, estimated at 5 million, though some estimates are as high as 15 million. Most are small family-run stores known as kirana stores. While organized retail makes up only 7.5% of the market currently, it is projected to reach 10% by 2018. Changing socioeconomic conditions are shifting consumer preferences towards organized retailers, who offer a better shopping experience through technology, quality, and variety. However, kirana stores still compete through low overheads and personal relationships. Both large organized retailers and small kirana stores will likely continue to survive and thrive as India's retail market transforms.

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    What Lies in Store For The Retailing Industry in India

    Uploaded by

    Ashutosh Singhal
    318 views3 pages
    India has the highest number of retail outlets per capita in the world, estimated at 5 million, though some estimates are as high as 15 million. Most are small family-run stores known as kirana stores. While organized retail makes up only 7.5% of the market currently, it is projected to reach 10% by 2018. Changing socioeconomic conditions are shifting consumer preferences towards organized retailers, who offer a better shopping experience through technology, quality, and variety. However, kirana stores still compete through low overheads and personal relationships. Both large organized retailers and small kirana stores will likely continue to survive and thrive as India's retail market transforms.

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    What Lies in Store for the Retailing Industry in India

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    India has the highest number of retail outlets per capita in the world, estimated at 5 million, though some estimates are as high as 15 million. Most are small family-run stores known as kirana stores. While organized retail makes up only 7.5% of the market currently, it is projected to reach 10% by 2018. Changing socioeconomic conditions are shifting consumer preferences towards organized retailers, who offer a better shopping experience through technology, quality, and variety. However, kirana stores still compete through low overheads and personal relationships. Both large organized retailers and small kirana stores will likely continue to survive and thrive as India's retail market transforms.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    318 views3 pages

    What Lies in Store For The Retailing Industry in India

    Uploaded by

    Ashutosh Singhal
    India has the highest number of retail outlets per capita in the world, estimated at 5 million, though some estimates are as high as 15 million. Most are small family-run stores known as kirana stores. While organized retail makes up only 7.5% of the market currently, it is projected to reach 10% by 2018. Changing socioeconomic conditions are shifting consumer preferences towards organized retailers, who offer a better shopping experience through technology, quality, and variety. However, kirana stores still compete through low overheads and personal relationships. Both large organized retailers and small kirana stores will likely continue to survive and thrive as India's retail market transforms.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    What Lies in Store for the Retailing Industry in India

    CASE STUDY REVIEW

    Group 3 South Campus | FMS (Exec) 2018-2020

    S013- Anita Chaudhary S018-Ashish Chawla


    S014- Anuj Kumar S019-Ashish Kumar
    S015- Anuj Kumar S020-Ashish Yadav
    S016-Anuj Kumar Jha S021- Ashutosh Singhal
    S017-Anupam Singh S022- Audhesh Tiwari

    Brief of case:

    India has highest number of retails outlets per capita in the world , estimated to be 5 million retail outlets
    of all shapes and sizes , even few agencies estimates this figure to 15 million too. Although most of them
    are small in sizes and occupying an average 500 square feet in size and managed by family members.
    These are typically known as kirana Dukan or kirana Store (mom and pop store in the US or the Corner
    grocery store in UK).Out of these retail shops organized sector constitute barely 7.5 of total retailing
    industry in 2013 and was expected to rise to 10 % by 2018.

    Market research agencies are very positive on prospects of the retail sector in India. For instance, A.T.
    Kearney’s Global Retail Development Index ranked India at 1st position while ranking 30 emerging
    countries on a 100 point scale in 2007 and it remained same for three consecutive years and in 2014 it
    ranked 20th. Over all retailing industry contribute 18 percent to GDP and it is forecasted to grow from US$
    520 billion in 2013 to US$ 950 billion by 2018.

    Size of organized retailing industry was estimated at US$40 billion in 2013 and projected to grow at a
    compounded growth rate of 19 per cent to US$ 95 billion by 2018. Due to high potential practically every
    major Indian business group have been looking for opportunities in growth of retail industry. Big players
    who have already entered in the sector are like, Aditya Birla group, Bharti, Godrej, ITC, Mahindras,
    Reliance, R.P Goenka, Tatas and Wadia group.

    COMPETETIVE SCENARIO

    In Indian context small retail shops and organized retail store are running parallelly giving good
    competition to each other. Although major corporate group have entered in the retail sector but small
    kirana stores are able to give good competition due to their low operating cost and low overheads.

    India is witnessing change in various socio economic conditions post liberalization and these factors are
    influencing the preferences of customers which is evident from increasing market share of organized
    sector day by day and if we analyzed this change based on Porter’s Five force of Competition frame work
    i.e political, economic, sociological , technological, legal and environmental, dynamic equilibrium can be
    visualized more clearly.
    Changing socio economic condition are favoring organized retail sector because kirana stores have image
    of paying little or no tax and present taxation system is discouraging every establishment which is not tax
    compliant or where chances of tax evasion is more. In organized sector because every transaction is
    recorded, tax collection is efficient this is preferred by tax authorities.

    With the effect of entry of big corporate groups economic condition of whole sector is changing
    dramatically. While old system small retail stores were run by family with least investment and technology
    but big retails stores like Big Bazar, More, Easyday, or Walmart have big investment and have large space
    and technology as a leverage. Their pricing is uniform and they are better placed to procure directly from
    farm or manufacturer having economy of scale, hence have better leverages in pricing, quality and
    variety. With latest technology bill is smooth and easy.

    Changing demographic environment of Indian urban land scape is also driving change is consumer
    preferences. Young generation like and nuclear families, double income families are giving preference for
    better shopping experience with organized sector(like shopping malls or good retail chain) , than old
    kirana store.

    Because of trained/ skilled manpower, technology and transparent system organized sector is better
    equipped for tax collection and other legal compliances. Whereas small kirana stores lags in these
    compliances but have low overhead cost better customer relationship and easy connectivity.

    Scenario is changing whether it is macro economic level or micro economic level and various changing
    business favors organized retails store but these changing business environment are not so detrimental
    to small retails stores that these will shut in near future.

    Industry attractiveness to competitive advantage:

    Here important question arise, what determines the level of profit in the industry and what is
    attractiveness of market?

    Here organized player is focusing on future market consolidation and capturing large market share.
    International environment is favorable to organized retail stores and Various International and national
    Single brand retailers are giving quality and variety of product which were available never before.

    At present organized sector is witnessing very tough competition with small retailers and small retailers
    are giving tough competition to the organized sector because of low capital employed and low overhead
    cost of small retailers. Although everything is not favoring the small retailers, economy of scale give
    benefit to organized sector, Organized sector has better bargaining power of products with their
    suppliers, huge capital employed give power to manipulate the pricing and offering other various
    attractive scheme, which small retailer can not.

    CONCLUSION

    Considering above analysis we can Indian retail sector is in transformation stage market share of small
    retails store is going to fall which is obvious because occupying 90% market share is not sustainable and
    it will reduce slowly but it is not going to vanish in any moment of time because of positive aspects of
    small retail stores( Kiran shop) will always be available for any sudden requirement of personal relation
    effect or credit facility are their USP and it will help them to survive.
    On the other hand, Organized retail store have ample scope to flourish because of increasing population,
    change in demographic and socio economic condition and young generation with nuclear families are
    force behind their growth. Technological innovations, quality, hygiene, better shopping environment are
    their added advantage. Both sector are going to survive.

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