India and the big Retailers Essay Example | Topics and Well Written Essays - 1750 words

India and the big Retailers - Essay Example Introduction: After the agricultural industry, retailing is the largest private and employing industry in India. This sector has a major contribution in India’s economy that is 10% of GDP and 6-7% of employment is derived from this sector. Much reorganization is seen in this sector in the past decade from small unorganized family owned retailers developed to organized retailing mainly by liberalization of the economy, expansion in consumerism, investment in retail infrastructure, entrance of many foreign retailers through cash and carry, franchising, local manufacturing, test marketing etc. India has been seen as a very attractive destination for the flow of FDIs and many foreign companies are willing to benefit from the advantages India has to offer. (MUKHERJEE & PATEL. 2005) On the other hand, resistance and protest against the entrance of the FDIs in retailing in India have been seen by the local trading associations and other stakeholders. Due to entrance of foreign compet ition in the retail market local trade is affected too and it has an effect on the employment, prices, technology, and efficiencies etc in Indian economy and market which have been the topic of debate recently. (MUKHERJEE & PATEL. 2005; GURUSWAM, SHARMA, MOHANTY, & KORAH. ... These super markets are usually situated main markets, malls and localities and due to economies of scale achieved in the purchasing and logistics, they offer highly competitive prices to the customers. The key local players in this segment in India are Nilgiris, FoodWorld, Big Baazar, and Subhiksha, these are comparatively smaller in sizes as compared to international super markets covering around an area of 3,000 to 4,000 sq. feet which is not even the half of what international super markets offer. (MUKHERJEE & PATEL. 2005; HOLLENSEN. 2011) Most of the retail stores internationally have reached at saturation points which has made them look towards the emerging markets like India, many of them has entered and many plans the expansion. Though after liberalization it isn’t easy for the international chains to enter Indian economy because foreign retailers are restricted to open single brand store with 51% ownership and to operate as a wholesaler they have to operate as 100%. T he first one to enter Indian market was Metro Group of Germany which established with a cash and carry format in 2003. Other big names Wal-Mart of USA and Tesco from UK also followed with their wholesale retail division. Apart from these giant wholesale retail companies other big names in retail like Nike, ZARA and Adidas established themselves in the Indian market. (MORSCHETT ET AL.2011; PLUNKETT.2008) Growth in the Retail Industry: In the past few years immense growth is seen in the retail sector due to liberalization in the 1990s when reduction in custom duties and a shift from quota to tariff based system. Due to the removal of barriers for entrance in the market, many multinationals entered India. Because of the increase in