Organised Retailing Serving the Bottom of the Pyramid

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Retail club-Aurora07 Organised retailing serving the bottom of the pyramid Institute Name – School of Business Management NMIMS, Mumbai Team Member 1 – Rohit Dhanuka Email Id – Contact - 9920697423 Team Member 2 – Vikas Chawla Email ID – Contact - 9833919901 Retailing encompasses the business activities involved in selling goods and services to their consumers for their personal, family or household use. It includes every sale to final consumers ranging from cars to apparel, to meals at restaurants to theatre tickets. Retail is the largest private industry in the world, with total sales of $ 6.6 trillion. Retail industry accounts for almost 8% of the GDP in the western world. The fact that the largest company of the world by sales, Wal-Mart is a retail chain, only confirms to the significance of this industry. The retail sector plays a significant role in the world economy because of the contribution it makes. Organised v/s unorganised retail The unorganised sector is usually associated with low-cost retailing consisting of street side vendors, supermarkets, kirana stores, paan-beedi shops, departmental stores, restaurants, hotels, handicrafts and so on, where normally only one person is in charge. But there are major drawbacks associated with such kind of retailing such as: Low employee skills Problems associated with the management of human assets Inability to offer a wide range of products Lack of sourcing capabilities Lack of proper storage facilities Now let’s have a look at the organised retailing in India This sector is showing a great promise, as per reports it is expected to grow to 42% by 2008. The reason for the sector gaining popularity is that today’s consumer is seeking better availability and quality, a pleasant shopping environment, more financing options, return and exchange policies and competitive prices. Use of plastic money such as credit cards for categories relating to apparel, consumer durables and food and grocery is on the rise. With better transportation and accessibility, to upcoming malls and stores it has become easy for consumers to get a variety of choices and preferences. These factors have created a rapidly growing opportunity for organized, modern retail formats to emerge in recent years and grow at a fast pace. The following table lists some other advantages of organised retail. Advantages Convenience of choosing through products Choice of everything under “ one roof” Heavy discounts on certain items like snacks, foods, electronic goods and groceries Loyalty cards/schemes Better and specialised services Cleaner and more pleasant ambience Specialised stores {draw:frame} Scenario of organised retailing in India The recent trends in India demonstrate that retailing is emerging steadily as an organised sector, with a variety of big business players expanding into retailing. The biggest of them Tata, reliance, RPG, Adanis etc are investing heavily in retail. A few facts about the organised retail sector in India Retail sector contributes 10% of the GDP Retailing is India’s largest industry and one of the biggest sources of employment in the country The organised retailing industry is estimated to be at Rs. 350 billion, a little under 3% of the total retail sector in India It employs 7% (21 million) of the workforce of India {draw:frame} The companies that are targeting organised retailing in India The table below shows the kinds of retailing formats in India Future prospects of organised retailing in India India tops the list of most attractive companies for international retail expansion, according to AT Kearney’s global retail development index. The $ 270 billion Indian retail market is growing at the rate of 13 % and the organised segment grew 48% in 2006 Projected growth for the organised segment is...
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