Project on Retail Sector

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Segments in the Indian Retail Industry

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The retailing sector of India can be split into two segments. They are the informal and the formal retailing sector. The informal retailing sector is comprised of small retailers. For this sector, it is very difficult to implement the tax laws. There is widespread tax evasion. It is also cumbersome to regulate the labour laws in this sector. As far as the formal retailing sector is concerned, it is comprised of large retailers. Stringent tax and labour laws are implemented in this sector.

If the retail industry is divided on the basis of retail formats then it can be split into the modern format retailers and the traditional format retailers. The modern format retailers comprise of the supermarkets, Hypermarkets, Departmental Stores, Specialty Chains and company owned and operated retail stores.

The traditional format retailers comprise of Kiranas, Kiosks, Street Markets and the multiple brand outlets.

The retail industry can also be subdivided into the organized and the unorganized sector. The organized retail sector occupies about 3% of the aggregate retail industry in India.

Size and contribution of the retail industry in India

In terms of value, the Indian Retail industry is worth $300 billion. Its contribution to the Gross Domestic Product is about 10% , the highest compared to all other Indian Industries. The retail sector has also contributed to 8% of the employment of the country. The organised retail sector is expected to triple its size by 2010. The food and grocery retail sector is expected to multiply five times in the same time frame. The major reason behind the low participation in the Indian retail sector is the need for lumpy investments that cannot match up their break even points. The government policies are being revised from time to time to attract investments in this sector.

The Indian Retail Industry—Sky is the limit

In terms of the retail development index India ranks fifth. In Asia it occupies the second position , next to China. Among all the global markets, the Indian retail market is the most expanding. This is owing to absence in restriction at the entry level. So the large foreign companies can reap the benefits of economies scale by entering the green retail fields of India. There are many reasons why the retail industry in India can reach the zenith.

Firstly the organised retail sector in India has a very low contribution to the entire retail sector in the country. Hence there is ample scope for the new players to achieve success in the backdrop of soaring disposable income of the upcoming generation. Secondly, not only have the incomes increased but there has been a sea change in the preferences of the consumers . These factors have acted as a stimulus for the ushering of foreign players retailing in apparels, accessories, electronic appliances etc. Large shopping malls have already mushroomed in the metropolitan cities. There still lies untapped potential in the Indian Retail Market.

|Structure of the Retail Industry In India | | | | | |[pic][pic] | | | |The retail industry continued in India in the form of Kiranas till 1980. Soon, following the modernisation of the retail sector...
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