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Studying about the organized and unorganized retail stores in india and its
difference
Article · November 2021
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International Journal in Management and Social Science
Volume 09 Issue 11, November 2021 ISSN: 2321-1784 Impact Factor: 7.088
Journal Homepage: [Link] Email: irjmss@[Link]
Double-Blind Peer Reviewed Refereed Open Access International Journal
STUDYING ABOUT THE ORGANIZED AND UNORGANIZED RETAIL
STORE IN INDIA AND ITS DIFFERECE
VEERABHADRA ILLUR
RESEARCH SCHOLAR, SUNRISE UNIVERSITY, ALWAR, RAJASTHAN
DR. MALLA JOGARAO
RESEARCH SUPERVISOR, SUNRISE UNIVERSITY, ALWAR, RAJASTHAN
ABSTRACT
India started its journey since ancient time. In ancient India there was a concept of weekly fair, where all
the buyers and sellers gather in a big market for purchase and sale of goods under barter system. This
retail journey in India takes lot of time to transform into modern retail. Apart from these two concepts i.e.
ancient retail concept and the modern retail concept are smell modern kirana / mom and pop shops or
Baniya ki Dukan. Even then retailing is dominating in India. Retailing in India is going through an
evolutionary stage and is one of the largest sectors in the global economy. The current estimated value of
the Indian retail sector is about 500 billion USD and expected to reach 1.3 trillion USD by 2020. India is
termed as the nation of shopkeepers with about 15 million retail outlets of all kinds and is dominated by
small neighborhood grocery stores termed as kirana stores1.
Keywords: - Store, Organized, Unorganized, Retail, Sector
I. INTRODUCTION
Retailing is one of the largest sectors in the global economy and is going through an evolutionary phase in
India. The Indian Retail industry has grown at a 24.6% CAGR during FY 09-14. This growth can be
directly credited to the emergent Indian economy as well as increase in Private Final Consumption
Expenditure (PFCE) and bring revolution in Indian peoples‟ consumption pattern. This tendency is
expected to continue for at least the next two-three decades, magnetizing huge attention from
entrepreneurs, business heads, investors as well as real estate owners and builders segments of the
economy. Despite this growth, the Indian retail industry is highly fragmented, with the organized retailing
still at a nascent stage which accounts for far less percentage than the unorganized retailing of the total
Indian retail market. It is estimated that organized retailing accounts for less than 5% of today‟s market,
but is expected to develop between14% to 18% by 2015. Though the organized retail sector is growing,
the impact of growth is affecting the unorganized retail sector, especially in the rural areas.
This study aims to identify the factors influencing the perception towards organized retailing from
unorganized retailers. The primary data was gathered by administering a prearranged questionnaire with
100 customers selected purposively from Ernakulum District in Kerala.
628 International Journal in Management and Social Science
[Link] Email: irjmss@[Link]
International Journal in Management and Social Science
Volume 09 Issue 11, November 2021 ISSN: 2321-1784 Impact Factor: 7.088
Journal Homepage: [Link] Email: irjmss@[Link]
Double-Blind Peer Reviewed Refereed Open Access International Journal
The rationale of the study is twofold: First, to examine the shift in perception in the retail sector taking
place due to organized form of retailing. Secondly, the area has remained largely an unexplored part of
research till date especially in Ernakulum.
The data analysis of customer attitude towards unorganized and organized retailers shows that there is a
difference between the consumers‟ perception towards both organized retailers and unorganized retailers
regarding their store image, range of products, brand choices, price, store atmosphere, credit availability,
and shop proximity.
The data has been collected with the help of structured questionnaire containing close and open ended
questions. Statistical software and MS excel were extensively used for analyzing the data collected.
II. ORGANIZED RETAIL SECTOR
The organized sector is registered with the government. Therefore, it is called an organized sector. In this
sector, the work of people is assured, and they get regular and fixed salaries. Organizations like schools,
enterprises, and hospitals fall under the organized sector.
It is difficult to become a part of the organized sector as it requires proper registration of the business,
which is a very difficult process. The organized sector is regularized by the government, and proper taxes
are applied to [Link] working in the organized sector get some benefits such as they get the advantage
of regular salary as well as job security. In addition to this, they are also provided with additional benefits
such as perquisites and allowances.
Employees of this sector have to work for a fixed number of hours a day on a fixed salary and increment
on salary is given to them after fixed intervals.
III. ORGANISED RETAIL FORMATS;
Increase in disposable income of consumers, leads to increase in spending habits by demanding quality
products and services and inclined towards better shopping environment. These all factors influence in
change of retail formats. Several formats have been experimented by retails. Some of them are;
1. Malls
Malls are located in proximity to urban outskirts and ranges from 60,000 sqft to 70,000 sqft and above.
The future of organized retailing is largely in the hands of mall where the shoppers gets quality, quantity
aspirational appeal recreation facilities and ambience.
2. Shoppers Stop
Shoppers stop is the first organized retail format to open departmental stores in India. Which was
promoted by the K Rahejacorp group (chandru L Raheja group) with its first store in Andrei Shoppers
629 International Journal in Management and Social Science
[Link] Email: irjmss@[Link]
International Journal in Management and Social Science
Volume 09 Issue 11, November 2021 ISSN: 2321-1784 Impact Factor: 7.088
Journal Homepage: [Link] Email: irjmss@[Link]
Double-Blind Peer Reviewed Refereed Open Access International Journal
stop ltd has been awarded „the hall of fame‟ by world retail congress at barcelana on April 10 200827. In
2011, shoppers stop has 53 store in India28
3. Convenience stores
A convenience stores are open for an extended period of the day and have a limited variety of stock and
convenience products prices are slightly higher due to the convenience given to the customers.
4. Hyper Markets
Hyper markets have emerged as the biggest crowd pullers due to the fact regular purchases are normal at
such outlets. Hyper markets are large self service outlets offering variety of categories with deep
assortments, hyper markets not only provide consumers the most extensive merchandise mix, product and
brand choices under one roof, but also create superior value for money advantages of hyper market
shopping.
5. Big Bazar
Big bazar is a chain of hyper market in India. As on 2012, there 214 stores across 90 cities and towns in
India. Big bazar is designated as an agglomeration of bazaars of Indian markets with clusters offering a
wide range of merchandise including fashion and apparels, food products, general merchandise, furniture,
electronics, books fast food and leisure and entertainment sections.
IV. UNORGANIZED RETAIL SECTOR
This sector is not registered with the government, and terms of employment are not regular and fixed in
this sector. No government rules and regulations are followed in the unorganized sector.
It is easy to establish an unorganized retail business as there is no need for registration and affiliation in
entering this sector. Therefore, no taxes are levied on this type of businesses.
This sector consists of small-sized enterprises and workshops where there is no unproductive and regular
employment. This sector includes low-skilled businesses.
There is no fixed limit on the number of working hours per day of an unorganized business. Even
employees in such businesses have to work on weekends and on government holidays also.
Daily wages are given to them, which is quite low than the wages given in the organized sector because
wages in this sector is decided by the employer and is not prescribed by the government.
V. UNORGANIZED RETAIL FORMATS:
A large number of people‟s livelihood depends primarily upon agricultural activities / unorganized sector.
Majority of consumers always fulfills their needs based on daily purchases.
630 International Journal in Management and Social Science
[Link] Email: irjmss@[Link]
International Journal in Management and Social Science
Volume 09 Issue 11, November 2021 ISSN: 2321-1784 Impact Factor: 7.088
Journal Homepage: [Link] Email: irjmss@[Link]
Double-Blind Peer Reviewed Refereed Open Access International Journal
Usually their needs are fulfilled by the neighbors Kirana / General stores road side vendors, weekly haats
markets, melas on special occasions unorganized retail formats in India are classified in two parts.
1. Non movable retail formats: such as kirana / general stores medical stores cloth and ready-made
garment shops cosmetics stores.
2. Movable retail formats; Weekly haat / market, hawkers and pheriwala, roaming salesman / vendors are
some of the movable retail formats.
All unorganized formats in rural areas provide for exchange of food grains / agricultural produce with
other items or cash.
VI. DIFFERENCE BETWEEN ORGANIZED RETAILING AND UNORGANIZED RETAING
ORGANIZED RETAILING UNORGANIZED RETAILING
The Organized retail sector is regulated by the The Unorganized retail sector is not regulated by
government and the employment terms and the government and employment terms and
working hours per day in this sector are fixed. working hours per day are not fixed in this sector.
The Organized retail sector is governed by There is no government act to govern the
various acts like Bonus act, factories act, unorganized retail sector.
minimum wages act, and PF act, etc.
Government rules are strictly followed in the No government rules are followed in the
Organized retail sector. unorganized retail sector.
Regular monthly salary is given to employees on Daily wages are given to employees.
the monthly basis.
There is job security for employees in the The working hours are not fixed in the
Organized retail sector. unorganized retail sector.
Workers in the organized retail sector are paid Workers in the unorganized retail sector do not get
additionally for the extra number of working paid additionally for the extra number of working
hours. hours.
Employers make a contribution to the provident Employers do not make any contribution to the
fund of an employee. provident fund of an employee.
Salary given to employees is equal to the salary Less salary is paid to employees than the salary
prescribed by the government. prescribed by the government.
631 International Journal in Management and Social Science
[Link] Email: irjmss@[Link]
International Journal in Management and Social Science
Volume 09 Issue 11, November 2021 ISSN: 2321-1784 Impact Factor: 7.088
Journal Homepage: [Link] Email: irjmss@[Link]
Double-Blind Peer Reviewed Refereed Open Access International Journal
ORGANIZED RETAILING UNORGANIZED RETAILING
The increment is given to employee‟s n regular Very rarely increment is given to employees.
basis (mostly annually).
Employees working in the organized retail sector No benefits or perquisites are provided to
get add on benefits such as a pension, medical employees working in the unorganized retail
facilities, leave compensation, travel sector.
compensation, etc.
VII. CONCLUSION
In the Indian scenario both organized and un-organized retailers in all segments will co-exist with their
own competitive advantages. The un-organized retail sector has low cost relationship, goodwill,
competitive price, quality products and door to door delivery system, credit facilities, while on the other
hands; organized retailing has long range or products, quality competitive price and hygienic atmosphere.
The prime aim of the study is to find customer perception towards organized and un-organized retailers,
impact on sales and profit margin, strategies adopted etc The study revealed that change in life style,
increase in awareness of quality products, disposable income switching over to organized retailers .But
still then un-organized market dominated in retail industry.
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632 International Journal in Management and Social Science
[Link] Email: irjmss@[Link]
International Journal in Management and Social Science
Volume 09 Issue 11, November 2021 ISSN: 2321-1784 Impact Factor: 7.088
Journal Homepage: [Link] Email: irjmss@[Link]
Double-Blind Peer Reviewed Refereed Open Access International Journal
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633 International Journal in Management and Social Science
[Link] Email: irjmss@[Link]
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