The Indian retail sector are witnessing a transition phase where organised retailing is taking a lead over unorganised retailing.in the light of above statement, explain the current status of...

The Indian retail sector are witnessing a transition phase where organised retailing is taking a lead over unorganised retailing.

in the light of above statement, explain the current status of current retailling?

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krishna-agrawala | College Teacher | (Level 3) Valedictorian

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It is not quite correct to say that, in India, organized retailing is taking a lead over unorganized retailing. It is quite true that the organized retailing in India has witnessed a vigorous growth in recent years, and is expected to continue to grow fast for some more time. But still organized retail trade accounts for just about one twentieth of the total retail trade volume. Thus the time when the organized retail will exceed the size of unorganized retail is still long way off.

Large scale organized retail is not something new to India. For example, Bata shoe company was, more than 60 years back, already successfully retailing its shoes through hundreds of company owned shops across the length and breadth of the country. However, in second half of the twentieth century not many of the large business houses of India had much interest in retailing. It was only towards the close of the twentieth century, that success of Wal-Mart as the biggest corporation in the World, and that of some local businessmen such as Kishor Biani, forced large business houses to turn their attention to retailing. As a result many of the largest business houses in India, including names such as Tata's, Birla's and Ambani's entered into retailing in big way.

Government also saw organized retailing as a promising organized industry, and in hope of attracting foreign investors to invest in this sector liberalized the norms of foreign direct investment in India. Currently, these norms permit up to 51% FDI in single brand retailing. In addition 100% FDI is permitted in cash-&-carry wholesaling which, at times, does act as retailer also.

The most popular structure for organized retailing in India is shopping malls situated in big cities. The biggest retail company in India today is the Pantloon Retail promoted by Kishor Biyani.

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