Retail in rural India

Abstract

The rural markets of India are growing at five times the rate of urban markets, though penetration of organized retail stands at a meagre 7.5%, pointing to a huge untapped market. Owing to this, tier-II and tier-III cities such as Jaipur, Nagpur, Ludhiana, Vadodara, Aurangabad, Kochi etc., are emerging as the new “hot spots” of consumption. Organized retailers are increasingly setting up stores in these smaller cities1. Moreover, the Government of India has currently allowed for 51% FDI in multi-brand retail trading and 100% in single-brand retail trading, creating opportunities for foreign players to enter Indian retail industry. Therefore, through this Contemporary Concerns Study, we aim to analyze the potential of organized retail in rural India. Let us first define the term retailing. According to the book Retailing Management by Michael Levy, Barton Weitz and Ajay Pandit, Retailing as the set of business activities that adds value to the products and services sold to consumers for their personal or family use. Let us also define the terms urban retail and rural retail and their differences before proceeding.