Importance Of Unorganized Retail Industry In The Growth Of Economic Development

Decent Essays
Indian retail industry plays a very important role in the growth of economic development. The Indian retail sector is experiencing an immense growth with changing size of population and an increase in the standard of living of people. Indian retail sector specially organized retailing has captured the attention of foreign companies, which in turn are showing their interest to enter India. Retail industry is also considered as one of the largest source of employment. Modern retailing formats are becoming popular now a day. Large number of malls, supermarkets etc. are setting up to contribute in the growth of new retail formats. Yet new retailing formats is facing problem due to the customer’s belief in traditional formats. Customers are not …show more content…
The participants were consumers, farmers, intermediaries, manufacturers and organized retailers.

Importance of unorganized retailing in India– In India major retail sector is unorganized retail sector. Indian Retail industry contributes about 11 percent in the growth of GDP in which 97 percent share is accounted by unorganized sector and remaining 3 percent is contributed by organized retail sector.

Reasons for unorganized sector domination in Indian market –
• In towns, kirana shops are more in use because these are traditional method of selling products and also because these shops are owned by families as their only business which are running from more than one generation.
• Customers are more loyal to their old kirana shops as they provide efficient services to their old customers. That’s why customers are not willing to switch over from these shops to others.
• In kirana stores products are available at smaller quantity so the middle class families prefer these shops as they are not in the habit of bulk buying.
• These stores are located at residential areas which makes buying convenient to consumers.

Opportunities of unorganized retail sector
…show more content…
They lack in skills and training in how to serve customers, how to deal with them etc.

Conclusion

Retailing is considered as largest industry in India and one of the biggest sources of employment. Various business groups are interested in the past few years like Reliance industries; Aditya Birla etc. organized sector has also captured the attention of some foreign companies. The results of the study shows that increase in infrastructure development, economic growth and changing size of population of consumers are the major factors of organized retail sector in India.
The study further depicts that new generation, coming retail formats, increasing awareness and innovative ideas are the strengths and opportunities of organized retailing. While change in size of population, increasing real estate costs are the threats and weaknesses of retail industry.
The study also reveals that with growing craze for organized retailing, the growth of unorganized sector is decreasing at an enormous rate. Hence the retailers of unorganized retail sector need to develop strategies to grab the opportunities and overcome challenges in this

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