Friday, January 13, 2012: 01:35:28 PM

Retail Poll Feature

Regulating the unorganised retail market

Though the unorganised retail sector calls for regulations, it is almost impossible considering its size and diversity

The unorganised retail sector in India is one of the most dominant yet less talked about sectors in India. In spite of its unorganised nature, the sector holds huge potential and is the most preferred for brands for making an impact in the market. This is mainly because the sector has tremendous penetration in the semi-urban and rural areas. Kirana stores, which constitute the majority of the retailers in the country, also primarily fall in this category and therefore have the closest connection with the common man.

Being unorganised also makes the sector prone to certain irregularities and there is also scope for more foul play. For example, if a retailer is aware that an essential commodity is only available at his/her store and nowhere else, there is a chance and an opportunity for him/her to resort to hoarding or overcharging. Though this would normally call for regulation in the sector, Indian authorities know that implementing policies that encompass such a diverse business sector is near to impossible. However, a recent survey by Retailing360 saw voters unanimously agreeing that there is a need for more regulation in the sector.
Too large, too diverse
According to Kolkata based business analyst Soumyajit De, “In my opinion there is immense need for regulation in the unorganised retail sector. This will help keep inflation at bay. Retailers have a tendency to hike prices even if there is a buzz in the market. However, to build such an infrastructure it would take decades in India.”
Lilavati Gupta, proprietor of Gupta Food Products, a small-sized food products supplier and seller in Varanasi, says, “It is important to segment the various retailers and then there can be some amount of control. However, considering the size and diversity of the sector, it seems almost impossible.”
It is clear that though there is a glaring need to implement regulations on the unorganised retail sector, its size and diversity are the biggest deterrents. However, as foreign forces begin to enter the market and the competition heats up, the movement towards organised retail is also expected to hasten.
Tias Chakraborty

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