Modern Unorganized Retail Sector

1. Himadri Shekhar
BBA|||

2. Definition
 Generally in unorganized sector an enterprise is owned by individual
or self-employed workers engaged in the production or sale of goods
or providing service of any kind whatsoever, where the number of
employees/workers is less than 10.
 It consists of small shops - conventional Kirana shops, general stores,
corner shops among various other small retail outlets but remain as
the radiating force of Indian retail industry.Traditional or unorganized
retail outlets are normally street markets, counter stores, kiosks, and
vendors where the ownership and management rest with one person
only.This sectors accounts for the two thirds of the market. generally
It runs with unskilled labor.These are highly profitable outlets as
these engage cheap workers (work is shared by members of family),
and lowest operational cost like rent, taxes, etc.

3. Common factors for large scale presence
of Unorganized sector.
■ Ease of entry
■ Smaller scale of operation
■ Local ownership
■ Less legal compliance
■ Labor-intensive and operating with less capital using lower technology based methods
■ Flexible pricing due to less operating cost

4. Bottlenecks in smooth operation of units
under unorganized sector
■ Less sophisticated packing.
■ Absence of a brand name
■ Unavailability of good storage facilities and an effective distribution network
■ Inadequate access to government schemes
■ Inadequate capital & resources.

5. HOW THE UNORGANIZED SECTOR
GETS PROMOTED AND HOW THEY DO
PRODUCT PROMOTION?
Knows each customer by name.
Knows customer’s likes and dislikes.
Gets to know about special occasion before hand.
Speaks for brand.
Informal customer feedback.

6. TRADITIONAL V/S ORGANIZED SECTOR
92
76
8
24
0
20
40
60
80
100
2015 2020 E
Chart Title
Unorganised Organised

7. ADVANTAGES OF
UNORGANIZED
SECTORConvenient Location, Lower
investment.
Benefits pass on to customer
due to low operational cost.
Flexibility in operation,
depending on demand.
Promotion of sale by allowing
Credit sale .
Group
A
Task 1
Task 2
Group
B
Task 1
Task 2
Group
C
Task 1
DISADVANTAGES OF UNORGANIZED
SECTOR:-
• Less scope of allowing discount.
• Delayed information of new arrival.
• Lack of specialty products In
attractive ambiance.

8. TURNOVER AND SHARE OF UNORGANIZED
RETAILING IN INDIA (IN CRORES OF RUPEES)
3200000
3825000
4565000
425000
670000
1050000
3625000
4495000
5615000
0 1000000 2000000 3000000 4000000 5000000 6000
2015
2017
2019
E
Total Retailing Turnover Organized Unorganized 2 per. Mov. Avg. (Unorganized) Linear (Unorganized)

9. C H O I C E O F R E T A I L F O R M A T
28
18.4
54.6
0 10 20 30 40 50 60
Category 1
Depends/ Not Fixed Unorganized Organized
…

10. What to do?
• The unorganized retailers should offer attractive weekly or monthly schemes for
groceries and other items and promote them through leaflets or pamphlets.
• Unorganized retailers should make remarkable changes in their store ambience to
retain the existing customers and attract new customers with sophisticated facility
and more space.
• Unorganized retailers should purchase variety of products from the single wholesaler
to avail adequate discounts so that they meet the cost expectations and needs of
their customers.
• The unorganized retailers should continuously improve their display to compete with
the organized sector and also adequate self service facilities to the customers.

11. Percentage stores of unorganized sector in
Bihar.
11
5
9
7
7
33
8
39
8
Stores
Food & Grocery Consumer durables Foot wear Catering Service Jewellery & watches
Books, Music & Gifts Mobile handset Others Clothing Furniture

12. FUTURE PROJECTIONS OF UNORGANIZED
SECTOR & OTHERS:-
27
6 5
6.5
48
7.5
0
10
20
30
40
50
60
Unorganized retail Others Conveinience stores Discount stores Hyper market & Super
market
E commerce
2021 E
Per 100 Store