Exeter Business School
Submitted By, Dimple Lalwani 640054955
Retail is one of the booming industries in India and moreover it is one of the pillars for nation’s growth as it has a holistic impact. In current scenario, retail is gaining importance and one of the reasons being its overall contribution of about 14% to GDP. Moreover as the market in developed economies got saturated Global retailers are focusing on developing economies for their business. As per 2012 A.T.Kearney’s Global Retail Development Index which is based on attractiveness of the market, risk prevailing in the country, saturation of the market and time pressure India ranks 5th. With an expected accelerated growth rate of 15 percent to 20 percent over the next five years India serves to be a high-potential market for retail business (ATKearney Inc, 2012). It is expected that India’s retail market will grow at a rate of 7 percent for next few years and by the year 2020 retail market will achieve a size of US $850 billion. India’s Traditional retail is anticipated to grow at 5 percent and arrive at a size of US $ 650 billion and organized retail is projected to grow at 25 percent and attain a size of US $ 200 billion by 2020 (Indian Industries Association, 2013). In the world, India is recognized as the fifth largest retail market and in terms of global retail development Indian retail industry is ranked at fourth place. By 2015-year end, retail industry of India is likely to expand to US $ 750 – 800 billion in terms of market size (Equity Master, 2013). Retail sector analysis revealed that due to noticeable shift and increasing trend of emerging organized formats in retail, volume of sales and productivity is enhancing in consumers goods and services. The retail industry at global level started experiencing major growth in the sector of organized retail. Supermarkets, hypermarkets, departmental stores, cash and carry outlets and other retail outlets that are regulated come under organized retail sector. Whereas pop and mom shops, pavement vendors, convenience stores etc which are not regulated comes under unorganized retail sector. Convenience to purchase with width and depth of product ranges under one roof offered by organized retailers resulted in growth of organized retail formats. Also various factors like changing demographic profile, increasing in the level of disposable income, change in customer preference and expectations, etc enhanced the growth or organized retailers, which are expected to reflect a serious threat to unorganized retail players. In developed countries approximately organized retail segment accounts to 80 percent where is in India, which is a developing nation, organized retail accounts to only 8 to 10 percent and the remaining percent is occupied by unorganized retailer players (Federation of Indian Chambers of Commerce and Industry, 2012). 2. Review of Literature
In terms of better width and depth of product choices, product availability, better shopping experience and price-organized retail will benefit the end consumers. More employment opportunities get generated and due to investments by organized players Information technology, systems and processes and infrastructure will be improved in India. As both modern and traditional retailers have their own competitive advantages, both will co-exist in India. Strategies followed by unorganized retailers to maintain their customer base and satisfy their loyal customers are ensuring kind behavior towards customers, providing credit facilities, free door delivery service and assurance for any kind of goods purchased by customers etc. Whereas...
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