Sunday, September 14, 2008

Organized Retail – Development or a Threat?

The retail industry in India is growing leaps and bounds. With major conglomerates such as Reliance, Aditya Birla Group etc. entering the retail space, the scenario has changed dramatically when compared to maybe 4-5 years back. One's first reaction to such large-scale entrants in a market where opportunities were considered to be scarce would indeed be positive. But is this evolution really helpful?


On second thoughts, it might not be as it seems. With the opening of a big air conditioned super market in the neighbourhood, local vendors are clearly at a loss, since you would never opt to shop from them when given the option of a much more sophisticated environment and quality assurance as well. This way, organised retail is actually becoming one of the contributing factors for the country's poverty, which has always been one of the major obstacles in the country's growth.


Usually, in today's fast paced world, people do not find time for each other and with the rise of such stores, it is leading to the ultimate isolation. Although such stores do provide employment opportunities etc., but an ordinary shopkeeper who is already pulling strings to make ends meet is now homeless. This clearly shows the increase in the divide between the elite and the not so elite.


Although shopping is considered more of an experience than a necessity, certain key points have to be remembered, especially in a country like India. Being a developing nation, care has to be taken to ensure that each and every section of the society is being focussed upon in equilibrium. There are many niche areas to be focussed upon apart from retail for the big Indian conglomerates. For instance, cyber stores could be opened in rural India itself promoting the use of technology where in the local people could be trained as well employed later on.


The positive impact of these retail stores is being noticed. But it's never too late to understand the diversity of the country and make a U – turn to rethink the whole concept again. It is always better to have the major part of the outcome as positive than the negative influences. As time passes, so would the impact.

5 comments:

JC said...

The article ignores the impact of Organized retail on poor homeless consumers. For e.g. consider this .I continue to be astonished by how the debate over the impact of supermarkets always ignores the huge gains in welfare of consumers, especially poor consumers… the gains to poor people from lower prices dwarf any losses to workers or suppliers.,
http://psdblog.worldbank.org/psdblog/2005/12/i_had_been_mean.html

Richa Gupta said...

Hi jc,

I somehow differ from your point of view. Agreed, supermarkets do sometimes give better deals than your local vendor, but they definitely are not accessible to consumers from the lower strata of society, for obvious reasons. For instance, I have never seen a worker who gets paid in wages visit a mall to buy groceries,etc. Further, I'm not completely against organised retail, just that the government should pay a little more attention to the lower strata also, in my opinion, before taking major initiatives in terms of the retail industry.

rahul said...

i agree wid the points which richa has made, coz keeping in mind the state of poverty in India, the organized retail seems to widen the gap between the rich and poor.....

t1g3r said...

Good article, very interesting insight. I think a common ground between organized and local markets can be reached. Many places in the world have been able to breach this gap with a middle ground solution. while they have supermarkets catering the needs of the picky and bulk orders, Those such big stores are kept away from local bazaars lest they hurt the smaller shops. That way everyone is happy. The idea of encroaching into a local market with a big supermarket which sells the same goods is never appreciated even here in europe.

sindhuja said...

I completely agree with Richa Gupta's view as everyone should realise tat India is still a developing nation,and its high time we call our India a developed nation.To call it so,we need to bridge the gap between the rich and the poor .