Submission Folder Video 1 \"Retail Revolution in India View video from the Onlin

Question

Submission Folder Video 1 "Retail Revolution in India View video from the Online Learning Center or use the following link http://www.viddler.com/embed/578b3370/2f 1&autoplay-0&player sim Retail Revolution in India" and answer the following question due 9/3 Brief overview of the video and then answer the assigned question. 1. Consider the pros and cons being debated by political leaders in India on the subject of whether big business in the retail sector is good or bad for the country. List 5 for each, you can use the following chart for your answer Pros, big business in the retail sector is good for the country Cons,big business in the retail sector is bad for the country Pts. Earned Video Assignment Grading Criteria Correct format Brief overview of video Answered all questions and content is complete Handed in on time (-1point each 24 Submit Cancel 3

Explanation / Answer

Following factor can be considered as Boon and Banes of Retailing Business:

Employment opportunities

Urban Employment :- Employment opportunities for youth, According to PricewaterhouseCoopers (PwC) it is said that retailing will create additional eight million jobs though retailing In India and will benefit population by employing local (Urban) youth and others directly or indirectly. But it is feared that our friendly neighborhood kirana shops where, one can make purchases in small quantities and return the goods if not found good and many more friendly services, will be on the verge of disappearance there by creating a vacuum which cannot be filled by the big organized one.

Rural Employment : - Contract Farming is the new mantra of organized retailing in India. There is no doubt that the farmers are in some way benefited by contract faming where in, the latest technology and equipment and scientific farming is done by farmers with the help of retailers there by increasing the productivity in agriculture, and uniform payment for their produce through out the crop irrespective of fluctuations in market price. But one should also focus on the freedom of farmers to sell their produce at will. It is evident in India that rich farmers who possess vast lands are the beneficiary but farmers who have little land and dependent on other trades are marginally benefited by this kind of business.

What small retailers and customers say?

"I've lost half my business," says Rajiv Das, who has been selling fruit and vegetables for 18 years and now has to contend with a new Reliance store a three-minute walk away. "I'm not able to fight, but I would if I could."

Similarly, Selva Kumar, who runs a kirana 100 meters from a Reliance outlet in Chennai, says, "We have lost 40 percent of our business, and that's the future. We're not closing, but there'll be no growth."

"It's good value here, better than other supermarkets, but there are difficulties with the quality, especially apples and papayas," says Rama Tibrewal, a middle-aged Reliance shopper in Hyderabad.

Competition

The organized retailers are financially sound in investing in Big Business promotion, aesthetic looks, technology and Supply chain management etc. Its business principle "The bigger the better". The Bigger retailers the better it can counter competition from small retailers and sustain business. But the unorganized retailer cannot compete and are trying fight hard against organized retailers however they cannot afford to invest heavy on technology and other inputs.

Due to tough competition, Customer have lot many opportunities and choices to go for, unless local retailers offer them best prices they wont be interested to come back, unorganized retailers stores are finally waking up to become competitive and try to attract more consumers.

Competitive trend

"Small pharmacy stores have teamed up to implement steps to fight back the competition from large chains. The All-India Chemist and Druggist Association (AIODC) are conducting talks with several companies such as Dr Lal Path Labs, Dr Reddy's Labs and Thyrocare Pathology to offer diagnostic facilities".

"Metro Cash & Carry will be starting a training school for kirana stores, in an effort to strengthen them and their business practices to take on the competition from organized retailers". Geraro Monzillo, the deputy managing director.

Government's Contribution

Government of India permitted up to 51% foreign direct investment in single-brand retailing in the country. This rule, to some extent saved the existence of unorganized retailers but in the long run there is a possibility that Indian Government may allow 100% FDI there by permitting to setup multinational retail operators which may wipe out the existence of unorganized sector.

Government's ignorance towards the needs of the unrecognized retailers and in one way discouraging them by not giving enough support in the form of financial, infrastructural, distribution, storage, transport, trade centers and other facilities makes it an awful situations for unorganized retailers and this may lead to catastrophe.

Growing Economic Disparity

In India more than 60% population is engaged in farming, which is major chunk of income generated and it is the equivalent to half of other sectors but disparities in income levels in India specifically rural India remain as wide as ever. Nevertheless employment will grow in all sectors and which will be of labor incentive. However, Work force of women in agricultural and services sector will enhance pressure on rural jobs in near future.

"Much of India is still mired in poverty, but just over a decade after the Indian economy began shaking off its statistic shackles and opening to the outside world, it is booming.... The growth of the past decade has put more money in the pockets of an expanding middle class, 250 million to 300 million strong, and more choices in front of them" (Despite Widespread Poverty, a Consumer Class Emerges in India, NYT 10/20/03).

Organized retailers impact on customers.

On the contrary Customers are enjoying wide variety of green produce under one roof, at the same time take pleasure in experiencing the way of shopping at affordable prices. Making it a habit, the day is no far that organized retail outlets will erupt in small tows and villages, influencing their purchasing behavior and their life styles.

About Retail Sector in India

Organized retail sector in India is exclusively concentrating in urban and semi urban areas currently occupying small percentage around 2%, the average space occupied by retailers is just beyond 500sq.ft. The volume of retail turnover is expected to grow at very high and is estimated to cross 4 lakh crore rupees a year, constituting 10% of India's GDP and employment generation.

Conclusion

The extraordinary role played by retail sector throughout the world in increasing productivity of consumer goods and services are commendable. And it is also becoming a major industry by creating millions of employment opportunities to people directly and indirectly is greatly admired. Retailing industry becoming one of the most dynamic sectors in India with numerous players jumping into this market makes it competitive and lucrative. Though organized retail sector is serving the needs and aspirations of high end and middle class customers but ignoring the common man's needs and aspirations are lamentable. So, the organized sector should look at the common mans needs, and his ability, affordability and go ahead, then only the aim of giving world class quality products at affordable prices to common man dream will come true, thereby contribution to the economic growth and up lifting the standard of living there by serving humanity.

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