Challenges faced by the Indian retail industry.

Despite of all these boom in retail sector in India it still facing various problems which are
stopping the INDIAN RETAIL INDUSTRY from reaching is full potential. The biggest challenge
facing the Indian organized retail sector is the lack of retail space. (10)

The main challenges faced by the retail industry are as follows.

1. Traditional kirana stores – this kirana stores accidently following the customer
relation management .These shopkeepers knows each and every thing about the
customer need and demand ,there purchase history ,and also about there families
also as these consumer are going to that same shopkeepers from generations. They
stock most of the goods required by the residents in a given area.

2. High cost for the organized retail sectors – as these stores are from centuries in
India It has a low cost structure, is mostly neither own operated and has negligible
real estate and labour cost and on the other hand well organized retail sectors have
high expenses to meet and yet have to keep prices low enough to compete with
these kirana stores.

3. Strong IT support – Information technology is the backbone of retailing .which

requires large investments as it has to connect each and every part of that stores ,
from supplier to the cash counters but in kirana stores they don’t need all these
huge investment in IT as they operate in small scale with huge customer range.(11)

4. Real Estate Hurdles - laws prevent the much needed growth in real estate
development, which imperative for retail growth. High real estate costs, Archaic and
user-unfriendly land laws, lack of proper city planning models are the most critical
issue facing organized retailers in India.

5. Lack of basic infrastructure - Poor roads and lack of cold chain infrastructure
hampers the development of food retail in India. The existing players have to invest
substantial amounts of money and time in building a cold-chain network.(12)

RETAIL CLASSIFICATION
Retail Industry is broadly classified into two categories namely -1.organized & 2.unorganized
retail.
ORGANIZED RETAIL - Organised retailing refers to trading activities undertaken by licensed
retailers, that is, those who are registered for sales tax, income tax, etc. These include the
corporate-backed hypermarkets and retail chains, and also the privately owned large retail
businesses.
Advantages of organised sectors:
  Workers in the organized sector enjoy security of employment.
 They work only a fixed number of hours. If they work more, they have to be paid
overtime by the employer.
 They also get several other benefits from the employers like paid leave, payment
during holidays, provident fund, gratuity, etc.
 They also get medical benefits and, under the laws, the factory manager has to
ensure facilities like drinking water and a safe working environment.
Disadvantages:

 Customs duties are levied on import of goods in India.

 The organized retail industry in India is faced with stiff competition from the
unorganized sector.
 There is a shortage of quality real estate and infrastructure requirements in our
country.
 Very high stamp duties on transfer of property affects the industry.(13)

UNORGANIZED RETAIL – it consists of unauthorized small shops –conventional Kirana shops

,general stores, corner shops among various small retail outlets .Traditional or unorganized
retail outlet are normally street markets or counter shops where the ownership and
management rest with one person only. These are highly competitive outlets, with
negligible rental costs, cheap workers and low taxes.
Advantages:

 Convenient location lower investment

 Provide credit period which creates personal touch
 Low infrastructure which means saving of money
 Operates in low scale and has minimum number of employees
Disadvantages:

 Lack of speciality products in attractive ambiance

 Low paid jobs which is also not regular.
 There is no provision for overtime, paid leave, holidays, leave due to sickness
 Employment is not secure.
References:-

1. Retail management – a strategic approach by berry berman 2007.

2. http://shodhganga.inflibnet.ac.in/bitstream/10603/121801/10/10_chapter
%201.pdf

3. http://www.indianmirror.com/indian-industries/retail.html

4. https://bizfluent.com/list-6679006-types-retail-formats-india.html

5. Venkta, Sharad (2017, Nov, 16) Indian Retail Industry-Growth, Trends,

challenges and opportunity. Retrieved from https://
www.indianretailing.com., Retrieved from https://www.ciiblog.in/indias-
booming-retail-sector/. , Mukherjee, Debashish(2017,Jun,14)Indian Retail
Industry-From potential to performance. Retrieved
fromhttps://retail.economictimes.indiatimes.com/news/industry/-indian-
retail-industry-from-potential-to performance 15141590.
6. Sanket (2018, March, 16) Top retail companies in India. Retrieved from
https://thingsinIndia. in/ retail-companies-in India/
7. JhunJhunwala, Rabindra (2018, March, 17) Retail market in India and recent
liberalization of FDI policy .Retrieved from
https://businessworld.in/article/retail-market-in-India-And-the Recent-
Liberalisation-FDI-policy/17-03-2018-143356
8. https://www.indiaretailing.com/2018/07/07/research/indian-retail-industry-
analysis/
9. http://www.indianmirror.com/indian-industries/2018/retail-2018.html
10. Dixit, K. (2008), “Retail Marketing in India; Key Issues and Challenges”, Marketing
Mastermind, February, pp.13-23, www.iupindia.in.
11. www.ijbmi.org
12. www.ijbmi.org
13. Read more on Brainly.in - https://brainly.in/question/1757719#readmore