The Future of Indian Retailing Industry

Retailing accounts for approximately 10% of Indian GDP and employs more people than any other industry. The challenges for achieving critical mass and generating employment in the retail industry relate to the integration of small and large retail, the integration of rural and urban markets and the integration of supply chains for a unified market. The issue is foreign direct investment (FDI) in retail; there are concerns that it will create monopolies and recent public outrage against such ventures has indicated things in store. Moreover, when developing policies for retail it is no use if only senior management of BIG retailers comes to media to make smart comments for a favorable condition. Social Workers, Farmers and Local Leaders needs to participate in any such decision making. Demand impetus can be created through a single market and uniform taxes.

All developing countries have allowed FDI in retail in a controlled way. Either wait until Indian retailers wake up or allow the retailers to benefit from the experience of other countries with caution. If retail prices go down, consumer spending will be spurred, and it is then irrelevant where the money comes from. From a marketing perspective, retail will give consumers more choice and allow local brands to develop. A mix of investment in cold storage and supply chains is needed.

India has a national policy on manufacturing, agriculture and tourism. Therefore, a national policy on marketing is now needed. There are, however, numerous alternatives with considerable differentiation wholesale vs retail, rural vs urban, lifestyle goods vs basic goods, etc. Within these lies the issue of organized vs unorganized marketing. Organized marketing has not eliminated unorganized marketing anywhere in the world; the two have to coexist. Organized marketing in India is growing at and has given a boost to real estate. It has, however, not helped rural marketing, supply chains, consumption and purchases by tourists. Malls have not started selling ethnic goods either. Some employment has probably been generated. A macro perspective on marketing is needed.