The Traditional Formats of India

Topics: Retailing, Shopping mall, Discount store Pages: 9 (2429 words) Published: March 14, 2013
Traditional formats of India

The traditional market square is a city square where traders set up stalls and buyers browse the merchandise. This kind of market is very old, and countless such markets are still in operation around the whole world. * Organized Retail: The sale of goods through a coordinated structure. Typically these are chain stores and are managed by Corporate or Cooperatives. For Example, Big Bazaar in India. There is generally a standard format of Presentation of goods. Such chain stores may span across multiple locations.

* Unorganized Retail: The sale of goods at has no coordinated structure. The administration is typically at the store level. These are referred to as “Mom and Pop” stores. These are typically stand alone stores with no specific format. In some cases, they also may have multiple stores at various locations .India as these have a traditional retail setup where the influence of the retailer over the buying decisions of consumer is very high. More than 80% of the consumers still purchase goods over the counter where the retailer physically picks up the product and then gives it to the consumer.A retailer can easily influence a consumer to buy a given product. The manufacturers realize the hold of these retailers as opinion leaders or influencers., trade promotions are given more focus. Trade promotion spending is typically higher than the consumer promotion spending even in the emerging markets.

Modern retail formats
Modern retailing, which is often called organised trade, facilitates the access for international brand manufacturers to wider chain store based distribution in the targetmarket. This is an essential cornerstone of success for the whole supply chain. Consequently, in emerging markets loyalty becomes a hot topic for retailers. In addition,maintaining loyal customers becomes top priority for any companies because of high switching cost and high attracting cost of new consumers. Recently, business articles and academic literatures have been focusing on the relationship commitment, customer satisfaction, customer loyalty and loyalty-based management [1]-[4]. It gives an idea that customer loyalty is very important in today’s global increasingly competitive environment India is a nation of shopkeepers. We can see more than 12 million retail outlets in India, and India has highest density of retail outlets in the world. Tracing the evolution of Indian retail would be incomplete without mention of the Canteen Stores Department and the Post Offices in India.

The Khadi & Village Industries (KVIC) was also set up post independence. Today, there are more than 7,050 KVIC stores across the country. The Co-operative movement was again championed by the government which set up Kendriya Bhandras in 1963. In Maharashtra, Bombay Bazaar, which stores under the label Sahakari Bhandar, and Apna Bazaars run a large chain of Co-operative stores

In India the retailing industry has a long way to go and to become a truly flourishing industry, retailing needs to cross various hurdles. The first challenge facing the organized retail sector is the competition from unorganized sector. Needless to say, the Indian retail sector is overwhelmingly swarmed by the unorganized retailing with the dominance of small and medium enterprises in contradiction to the presence of few giant corporate retailing outlets.

The trading sector is also highly fragmented, with a large number of intermediaries who operate at a strictly local level and there is no ‗barrier to entry‘, given the structure and scale of these operations (Singhal 1999).The tax structure in India favors small retail business. Organized retail sector has to pay huge taxes, which is negligible for small retail business. Thus, the cost of business operations is very high in India. Developed supply chain and integrated IT management is absent in retail sector. This lack of adequate infrastructure facilities, lack of trained work...
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