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Indian Retail Sector Information Essay

4252 words - 18 pages


SIT Journal of Management Vol. 3. No. Special. November 2013. Pp. 1-11

A Comparative Study of Organized and Unorganized Retail Sectors in Bangalore
Mihir Dash* & Sam Chandy** Abstract This study analyzes the challenges and opportunities faced by organized and unorganized retail players in Bangalore. It was found that organized retailers see competition from the unorganized sector as their biggest challenge, followed by competition between organized retailers and the inefficiency of distribution channels, internal logistical problem and retail shrinkage, while unorganized retailers see organized retailing as their major challenge, followed by cost of operation, logistical problems, ...view middle of the document...

**Sam Chandy, Vice President, Operations, Supercold Refrigeration Systems Pvt. Ltd. Industrial Estate, Manvila, Kulathur P.O.Trivandrum, Kerala – 695583.

Dash & Chandy ISSN: 2278-9111
Electronic copy available at:


SIT Journal of Management Vol. 3. No. Special. November 2013. Pp. 1-11

Dash & Chandy ISSN: 2278-9111
Electronic copy available at:


SIT Journal of Management Vol. 3. No. Special. November 2013. Pp. 1-11

Indian retail is expected to experience tremendous growth in coming years, and is already labeled as the sunshine sector in India. The Indian retail sector can be broadly classified into the organized and the unorganized retail sectors. The unorganized retail sector typically consists of small-time family-run retail outlets popularly known as „mom and pop‟ stores or kirana stores. The organized retail sector typically consists of large retailers with large numbers of outlets, product assortment, customer convenience, and so on.

The organized retail industry in India is estimated to be an impressive US $518 billion in 2012, and has been growing at 10.6% over 2011-12. However, the retail market in India is the most fragmented in the world. Only 8% of the entire retailing business in India is in the organized sector, and this share is expected to grow to 20% by 2020. However, this growth may be impossible without overcoming the numerous challenges faced by the industry.

Organized retail is in the stages of finding its feet in India even now. Organized retail trade makes up over 70-80% of total trade in developed economies. India‟s retail contribution is quite low even when compared to other developing Asian economies like China, Thailand, South Korea and Philippines, all of which have retail contributions close to 20-35%. These figures quite clearly reveal the relative underdevelopment of the Indian organized retail sector.

Challenges faced by Organized Retail Sector in India The organized retail sector in India is still at a developmental stage, characterized by a very small number of players trying to create a new paradigm. To become a flourishing industry, the Indian retail sector has to attract leading Indian and foreign players to make substantial investments. In addition to this, a number of challenges which organized retailing faces are identified.1


Dash & Chandy ISSN: 2278-9111
Electronic copy available at:


SIT Journal of Management Vol. 3. No. Special. November 2013. Pp. 1-11

Technology is one of the major challenges faced by organized retailers; specifically, the availability, feasibility, and adoption of technology. Technology is already being widely used for a host of activities including theft prevention, logistics, billing & payment. The scope of technology is much wider, and can be used for other...

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