The Unorganized Retail Sector Requires a “Blue Victory”: NaMo to Bell the Belly!

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Retail sector in India is one the upcoming sectors where many new things & splendid happenings are yet to be attained. Classically speaking, the changing face of Indian retail plethora is divided into -Organized and Unorganized.

In spite of tremendous exponential growth & revolution trends in the organized  retail market after 2000, the unorganized retail or mom and pop has always been the top favorite of many hyper shoppers and almost 90% percent of the total revenue comes out of this retail format which naturally consist of sabji mandi,vending zones, haat, hawker, dahi vada walas and so on and these are preferred destinations because of their low investment portfolios.


Image Courtesy: Wikimedia Commons

Unorganized Retail Sector: The super values of this format are illustrated below:

  • It is an easy mean, median, and mode of self-employment and entrepreneurship.They are huge employment generators too because only 8% Indian people are working in malls and other hypermarkets.
  • It doesn’t require a huge investment planning through a wise investment manager.
  • These are mostly family run businesses or one man shows or sole proprietorship firms.
  • No specific standard operating procedures need to be carried out to run such kind of businesses. Stringent Code of Conduct is not required at all.
  • Easy availability of daily wage earners due to high unemployment ratios. Plenty of semi-skilled manpower is ready to work 24x7x365.
  • They are always available nearby to colonies and localities at walkable distances which can be visited in capris.You can just make walk the talk with your kith and kin to these grocery outlets.
  • Small needs can be fulfilled instantly. It’s more of a convenient shopping in its kind.
  • They extend monthly credit facilities to customers. Face values are only important parameters to get credit.

If Indians are not going to tap this huge potential,it will be tapped by Global Retail Giants like Walmart, IKEA, Carrefour, Starbucks, KFC, Tesco and so on who are eyeing on Indian platforms because of massive emergence of mall class and  their speculative desires to lead elevated  Page- 3 lifestyles .

Walmart has got a dark sparkling history of dominance and monopoly in the field of retail. It has got a record of violating employment laws in the USA. It normally eliminates middlemen and small businesses. It forces the suppliers to get dependent on its stores .This is called  the great“WalmartDictatorshipp”.Hence it’s an opinion poll for Indian government to take some necessary steps to reengineer mom and pop before the brick and mortar overlaps the former.There is an urge for 360 degree change.

Hence it’s an opinion poll for Indian government to take some necessary steps to re-engineer mom and pop before the brick and mortar overlaps the former.There is an urge for 360 degree change.

But before preparing an absolute blueprint of development, we need to work out on the followings constraints in Unorganized Retail Sector:

India lacks in  maintaining a proper SCM which normally faces many inherent  non-standardization issues. We need to have some large cap ideas to reinvent this logistics dynamics.

It is quite difficult to create the same STP model for the entire population.It varies according to different buying segments.

The unorganized sector is  mainly controlled by some local goons.We need to catch hold them first.The system is to be changed.

There is also a lack standard taxation policy and framework.It needs to be revised first.We need to take a serious review and action to combat false deficit and black marketing in this field too.

India doesn’t have great infrastructure project managers.Thus we face many infrastructure problems and telecommunication threats.This field requires a large attention.

FDI debate regarding 100% investment is another pinching hole.We need to have a clear stance on many fronts. After all it can redirect large scale foreign funds into our skilled economy.

The retail sector doesn’t have much trained and certified manpower. Most of them are lacking in their basics. So it’s just like teaching an elephant to dance. Courses like Retail Sales in skill development space are also not doing so well as far as manpower planning of retail giants like Westside, Reliance, Future Life Style etc. are concerned.These courses have nothing to do with unorganized retailing.

Problem of car parking in different areas is another bottleneck.There is again no regulations in this reality sector of India. Demonic landlords are the main deciders and you can never get a strategic location for your businesses. Mostly wrong locations are finalised and many retail shops like Vishal got sold out due to these issues.

So the Indian retail space has moved from selling products to selling memorable experiences or delights to end users.We should also learn few techiques from Indonesia, China and Japan when it comes to revolution in retail.

The following steps can be take to have a planned unorganized retail junction:

  • The local shops should keep their commitments and should try to do some database management.
  • They should also opt for new technologies like CRM,RFID and so on.Embracing new technologies would accelerate the quantum growth.
  • They should not be always profit oriented. Rather they should also make some value additions to these convenience shoppings.
  • Delivery model should be emphasized more. We need to do a concrete strategy to ensure timely home deliveries.
  • They should think sponsorship as a method of brand buliding. Local festivals can be sponsored by these Kirana stores.
  • Competitive pricing and MRP regulation should be introduced.The GST bill will of course help in reducing the burdens on cousumer heads.
  • As far as credit is concerned they can also adopt prepaid schemes where a customer should be encouraged to deposit a part of money every month and enjoy hassle free shopping in the rest of the month.
  • The goverment should also take some necessary steps to condemn the cheating practices which is prevalent in this sector.Their should be some regulations , restrictions and penalities
  • These desi-businessmen should be given skill training on importance of smiling and gestures which is actually the need of the hour.
  • There should be some Kirana Policy in both center and state levels.The govt can also invite third parties to organise this sector. Loan schemes and other innovative practices should also be conducted to glamorize this format.

Hope is the only weapon which keeps the battle always on. We –“the Indians” are actually dreamers. NaMo is a seller of dreams. Let’s see how far Mr.Narendra Modi will be able to convert these unorganized Indian dreams into crude realities. India wants some reality check. Best of Luck Modiji.

If winter comes, can Ache Din be far behind? We want some real reforms in an unorganized retail sector. Since NaMo seems to be a grass root politician in 50-50 democracy, Indian subcontinent expects him to show his magic in retail dynamics too.

Trends, Latest Forecasts and Other Govt.Initiatives at a Glance(Source:Edited Excerpts from Google earth, 2016)

  • A T Kearney ranked India as the fourth most beautiful nation for retail investment among 30 emerging markets.
  • The retail market is expected to reach the magical figure of Rs. 47 lakh crore by 2017, as it expands at a CAGR of 15 % as per the ‘Yes Bank – Assocham’ study.
  • The Indian retail market, currently estimated at $490 billion, is likely  to grow at a CAGR of 6 % to reach $865 billion by 2023.
  • India is one of the fastest moving retail markets in the world placed as world’s fifth-largest global destination in the retail space.
  •  Wall Street Journal- the retail industry contributes nearly 22% of the country’s GDP .
  •  D&B –  unorganized retail sector in the country constitutes of 94% of the total retail sector.
  • Some of the flagship initiations include Make in India, Digital India, Clean India, Skill India, 100 Smart Cities and Startup India Stand up India.
  • PM Narendra Damodardas Modi launched the ‘Stand Up India’ scheme under which many banks will offer loans ifrom Rs 10 lakhs to Rs 1 crore to Dalits and women. Under this yojana, 1.25 lakh banks will provide loan to 1.25 lakh young people from marginalised tribes & communities.
  • The central ministry will shortly unveil a roadmap for startups to facilitate the process of setting up new venture.
  • The MSME ministry also said that 292 PSUs in India have been mandated to procure 20 per cent of their requirements from MSME sector.
  • The GoI has permitted 100 per cent FDI in the marketplace format of e-commerce retailing.

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About Sanmay Rath 125 Articles
Sanmaya Rath is a training Head at Black Panther Guards & Services Pvt.Ltd, Bhubaneswar. Formerly Professor(Marketing),Krupajal & INC,Bhubaneswar. Visiting Prof.(IEP),FABS B-School Pvt.Ltd.,Bhubaneswar. Associated with 2COMS, Bajaj Allianz,Bharti Airtel.