From Traditional Markets to Shopping Malls

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From Traditional Markets to Shopping Malls...
A paradigm shift
A new idea whose time has come when arrives cannot be bunged by anyone. Especially when it proposes an essentially finer monetary and behavioral value scheme to its clientele, it gradually takes over the old way, and other stakeholders have no option but to acknowledge and transform accordingly. Modern retailing is one such inevitable reality which has started taking a spin in the traditional retail scenario and is soon liable to capture the retail sector and further enhance its compass. All elements in the delivery chain better accept it and prepare, rather than trying to rob the customers of a superior way of life by promulgating fallacy and protecting vested interests. The question which then arises in the face of this foreseeable change is the future of the traditional outlets (Kiranas) with a network so intense that most of us have a kirana store within five minutes of our residence. The kiranas also operate on a low-cost model with family-owned properties (an extension of the house), with most of the family working in the store itself. They cater to impulse needs at short notice, and early opening and late closing times which suit many families. The supermarkets on the other hand propose an elite ambience with economy for all sectors of the society. This paper deals with the dilemma of calling this confrontation - competition or conflict? Both rivalries have competitive advantages. The kirana will have a low cost structure, convenient location and customer intimacy. Modern trade large outlets will have product width and depth, disintermediation and technology. Like in any competitive market, the smartest survives and the consumers win. Indian retailing is unorganized and due to its feudal structure and inefficiency need for Organized Retailing is being felt day by day. Organized retailing not only provides better customer services but also facilitates easy and smooth handling for the government. At the same point of time if FDI is also approved in Indian Retailing, it would not only streamline the retailing of India, but would further accelerate expansion of markets. There is enormous scope for foreign players in Indian economic conditions, and if some how FDI be extracted it would supplement not only the customers by better services but also the government by capital inflow, generating employment and by becoming big source of tax revenue. The transformation……

In the last five years (2001-2006) Indian retailing industry has seen exceptional augmentation. Where the country was in the dominance of unorganized retailing the organized retailing sector has now emerged in a momentous way and is contributing significantly to the growth of Indian retail sector. It is predicted that organized retail will form 10% of total retailing by the end of this decade (2010). Cultural and regional disparity in India is the major challenge in the face of retailers. Due to this factor the retailers in India are deterred from adopting a distinct retail format. And so there is a scope for a variety to formats to co-exist in India.

The graph above shows the comparison of how organized retail sector has penetrated various countries around the globe. We can see that India has the lowest share in the organized retail sector as compared to other countries. And hence the scope for its growth in the coming years is imperative. The urban section of the country is witnessing a major growth in organized retailing. Almost 85% of the growth is in this sector. And out of this more than 60% of the development is in the metros. The southern part of the country is observing a faster growth rate than the northern states. The total retail market in south India is $94 billion and of this organized retail is $8.5 billion. In southern part of India the organized retail market growth is estimated as 35 per cent per annum. There has been a magnanimous increase in the entrants in...
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