A COMPARITIVE STUDY ON

ORGANISED AND
UNORGANISED RETAILING
IN
INDIA
PRESENTED BY
HEMANT SACHAN

M0729
SEC-A
PGDM
OBJECTIVE OF THE STUDY
The objective of my study is to
 Know about the retailing in India
 Comparative study of the organized retiling sector and
unorganized retailing sector
 AN OVERVIEW ON GLOBAL
RETAIL INDUSTRY
Nine retailers belongs to global fortune 100 companies
1 220 Wal-Mart
24
35 62 Carrefour
38 60 ahold
46 54 Home Depot
55
Retailers
56 50 Kroger
68
72 44 Metro
83 41 Sears
89 40 Target
93
100 38 Albertson's
RETAIL INDUSTRY IN INDIA
INDIA’S retail industry is in the growth stage and with a
three year compound annul growth rate of 46.64
percent, retail is the fastest growing sector in the Indian
economy.
Traditional markets are making way for new formats such
as departmental stores, supermarkets, exclusive stores
and specialty stores.
Retail trade contributes around 10-11% of India’s GDP and
currently employs over 4 core people. Within this,
unorganized retailing accounts for 97% of the total retail
trade. Traditional forms of low-cost retail trade, from the
owner operated local shops and general stores to the
handcart and pavement vendors together form the bulk of
this sector. In the absence of any significant growth in
organized sector employment in India in the manufacturing or
services sector, millions are forced to seek their livelihood in
the informal sector. Retail trade, which has been a relatively
easy business to enter with low capital and infrastructure
needs, has acted as a refuge source of income for the
unemployed
The Central Statistical Organization (CSO) in its national
accounts statistics (NAS) uses the classification of
‘organized and unorganized’ sectors.
According to it : “Generally all enterprises which are either
registered or come under the purview of nay one of he
acts, such as Indian Factories Act, 1948, Mines and
Minerals (Regulation and Development) Act, 1957, The
Company Law, the central/ states Tax Acts, and the
Shops and Establishment Acts of the state
governments, are defined as organized sector…..
All unincorporated enterprises and households industries
which are not regulated by any acts and which do not
maintain any annual reports presenting the profit and
loss and the balance sheets are classified as
unorganized.”
IMPACT OF SMALL RETAILERS
ON THE BIG RETAILLERS
The customer favors the small retailer for the low price and
services he offers. The small retailer is providing all
those services, which supermarkets normally doesn't.
such services include telephone order system, credit
system, home delivery and face value.
More importantly he is available next door; most often the
owner himself is present to offer personalized service.
This has forced supermarket to offer same range of
services as small retailers.
IMPACT OF BIG RETAILERS ON
SMALL RETAILERS
Retailing in India is in the process of getting more
organized and professional. Large retail format
supermarkets and shopping malls are set to take over
the retail scene. Small retailers no longer remain the
primary source for the basic monthly basket. The
consumers normally get better prices, quality, selection,
and convenience for these purchases at organized retail
chain. For example,
example if a customer buys 100 items a
month, he now buys 80 of them from the supermarket at
one go, and remaining 20 as and when required from
the smell neighborhood retail out let.
. A number of large domestic business groups have
entered the retail trade sector and are expanding
their operations aggressively. Several formats of
organized retailing like hypermarkets,
supermarkets and discount stores are being set
up by big business groups besides the ongoing
proliferation of shopping malls in the metros and
other large cities. This has serious implications for
the livelihood of millions of small and unorganized
retailers across the country.
FINDING FROM THE STUDY
The finding is this that the small retailer will be around
because, by his very nature, he will be able to deal with
several peculiarities in the Indian consumer psychology.
For example,
 one myth is that ‘whatever is modern is expensive’. This
keeps several potential middle class shoppers from
buying from supermarket.
 Another myth is that fresh foods that are pre-packaged
may not really be fresh.
 Another finding is this that Organized retailing has
witnessed considerable growth in India in the last few
years and is currently growing at a very fast pace. A
recent survey report prepared for the FICCI states that
organized retail, estimated as a $ 6.4 billion industry in
2006, is projected to reach $ 23 billion by 2010. The
share of organized retail in overall retail sales is
projected to jump from around 3% currently to around 9-
10% in the next three years. A number of large domestic
business groups have entered the retail trade sector and
are expanding their operations aggressively.
RECOMMENDATION
Following are my recommendations for unorganized retail
sector:-
 Unorganized retail sector consists of small shopkeepers
and retailers, they are very vast in number but they don’t
have unity, they have to form unity in themselves.
 They have to be more focused on making personal
relations with the customers.
 Have to keep on the bargain.
Recommendation for organized retail sector:-
 The income is rising in the urban middle class families,
this will increase their ability to buy branded products.
 They also have to work hard on PR services. Because
they are facing challenge from both the sectors.
 They have to give discounts not only in the seasons but,
all the time.
CONCLUSION
Thus I can conclude that with the economy opening up,
the retail industry, of late is going through several
changes. Big players and MNC’s have started to enter
the retail industry and a new dimension is being given to
the retail business. The survival of the retailer, small or
big, has become difficult. Supermarkets are yet to get
the great Indian middle class and rural India in their fold.
Until then, small retailers will be the most sought after
retail entities, especially by those marketers who are
keenly looking at penetrating semi-urban and rural
areas.
LIMITATION
The main limitation of my study is that I have collected my
data from secondary sources. So my findings and
knowledge is totally depend up on the findings and
researches of others.