- Global Scenario
- Retail chain Reviews
Insights from Global Cases
Main Insights from the Study of Global Retail Markets
Once the retail gets industry status or otherwise a major policy is announced, it’s likely that there will be some protective measures for the unorganized retail sector. Going by international experience we can say that it is more likely to be delegated to state governments who in turn may pass these responsibilities to City-municipalities. A comprehensive national retail restriction (zoning, licensing) policy may not be feasible in India given its diversity and the federal system.
As we saw in the case of Brazil and Indonesia, such restrictions may be ineffective in putting a check on the growth of organized retail sector. Due to their deep pockets they can always find loopholes. So the onus is really on the unorganized retail to increase its competitiveness rather than depending on government intervention (especially when we don’t know when will it happen and to what extent)
Certain categories like fresh food is still likely to be dominated by the small retailers, mainly due to customer psychology, supply chain problems of a country like India, inherent structure etc as is evident from the case of Indonesia where even after 2 decades of the advent of organized retail still 90 per cent of fresh food is controlled by the unorganized sector.
Other categories like dry food, electronics, furniture, apparels etc may see the organized sector making early in-roads, this again is a global phenomenon particularly shown in the case of Indonesia
As the demographics of the country will change in another 20 years or so, when we will have a big chunk of our population in middle-older age segment, the unorganized retail will get a new target segment due to its convenience factor. This case was supported by the example of Brazil.