Indian Retail Industry

Retail is a concept consist of sale of physical goods or merchandise, it is the set of activities that adds value to the products and services sold to consumers for their personal or family use. Retailers buy goods in large quantity from manufacturer and sell it to the ultimate consumer.

Retail sector which is mainly divided into two sectors i.e. Organized and Unorganized.
Organized retail is when all the product and services are segregated and brought under one roof in a very proper and organized way. Organized retailers having large area and contains most of the brands under one roof on the other hand unorganized retail is like all the kirana stores where different things are sold in different shops, these shops are also known as “mom and pop shops”.

By the type of product we can divide retail industry mainly in three categories-

•   Food Products
• Hard Goods (Appliances, sporting goods, furniture etc.)
• Soft Goods (Apparel and other clothing)

 According to the marketing strategy retailers can be divided into following   categories-

a.       Department Stores: These are very large store with huge assortment of soft and hard goods.

b.       Discount Stores: These stores offers extensive assortment of merchandise at discount price.

c.       Warehouse stores: Offers products with low cost and high quality, these stores also charge membership fee.

d.      Variety Stores: Offers extremely low cost goods, with limited selections.

e.       Mom and pop: Traditional kirana stores.

f.       Specialty stores: Offers products of special and particular variety.

g.      Hypermarket: Offers huge variety of merchandise at low margin.

h.      Supermarket: Its area of operation lies between 20,000 and 40,000 square feet and these are self service stores.

i.        Malls: Has different kind of retail shops under one roof.

j.        E-tailers: offers shopping through internet.

k.      Vending machines: It is an automated machine wherein consumer drop in the money and can get the product.

Retail industry in India is one of the fastest growing industries, accounting for 22% of GDP and which contributes to 8% of total employment. Indian retail industry is of Rs18.673 billion (US$ 401 billion) [Booz & Co(India) Pvt. Ltd.]. Indian retail industry has witnessed a very rampant growth over the last few years. Retail industry in India has grown at a CAGR of 13.3% for the period FY 06-10. In India retail industry is mainly dominated by the unorganized retail sector i.e. by traditional kirana stores, there are approximately 2 million mom and pop shops in India which is a very huge proportion of total retail sector in India. Organized retail is accounted for approximately 4% only of total retail sector. Indian organized retail industry is of Rs35,000 Cr ( $7.7 bn) and which is growing with the pace of 25% -30% p.a.