Sustainability model for unorganized retail format in India

Abstract

Indian retail sector is in its nascent form. While most of the developed and emerging market economies have reaped the benefits of modern retail, India has not yet entered into full fledged expansion of modern retail forms. Future of retail sector in India is uncertain- on one hand organized retail is making its way into Indian market, while on the other unorganized retail outlets, for example the neighbourhood kirana stores already have a strong foothold. India today is at the crossroads with regard to the retail sector. A shift in pie between organized and unorganized retail sector is evident, which has led to a number of speculations on the fate of Indian retail sector. Need for this study While the role of organized retail sector in growth of economy cannot be denied, unorganized retail format is a support to a large chunk of population- providing direct employment to 39,500,000individuals1. In light of changing face of Indian consumerism: evolving psychographics and changing demographics, unorganized retail sector is in grave need to restructure itself in order to withstand the increasing competition and meet consumer expectations. As in other countries, government policy can and should play an important role in modernizing the unorganized sector and improve its competitiveness. Policies for protection of traditional retailers by restricting organized retail will harm the growth prospects of the country by foregoing the enormous benefits that are generated by organized retail. However, government can act only as a facilitator and other interested organizations as enablers. It is important for traditional retail formats to restructure and modernize themselves and adapt to survive and sustain in this changing retail ecosystem. In the said context, it is imperative to develop a strategic roadmap for unorganized retail form to be able to survive, compete and keep the economy growing.