Indian Unorganized Retail: The Largest Consumer Market
Small retail businesses functioning on a lesser scale with little or no standardization and selling items in divided amounts to local clients within a small geographical area make up unorganized retail
India is one of the finest places in the world to invest in retail. The world's second-largest population, expanding urbanization, rising household incomes, connected rural customers, and increased consumer spending are just some factors that make India so appealing. Despite this, the unorganized retail sector serves a sizable portion of the population. As per a report by Statista, in 2019, the unorganized sector dominated the Indian retail industry, accounting for 88 percent of the total. Although the organized and e-commerce industries have grown significantly in recent years, the impact has not yet been noticeable. However, by 2021, this percentage is expected to drop to 75%, owing to a higher share of organized retail and a rise in online retail.
Even after the development of a large-scale organized retail business, the unorganized retail market remains the most important method of retailing in India for most of the people. The ancient unorganized retailing in India has developed into the Indian retail business of today. Small retail businesses functioning on a lesser scale with little or no standardization and selling items in divided amounts to local clients within a small geographical area make up unorganized retail. However, they have a huge potential for growth and development in India.
Significant investments and businesses in unorganized retail have been witnessed in India in recent years, indicating that investors and entrepreneurs perceive unorganized retail as a tremendous opportunity. However, the focus has so far been on horizontal solutions that aim to use technology to improve the efficiency of unorganized retail. Whereas the unorganized retail industry in India needed a simplified structural solution. The Dukantech model has given that solution to the sellers. We witnessed the pandemic was very tough for the local sellers as they lost their customers because most of their customers were moving towards online shopping. The sellers lacked an assured platform where they could sell online with little technical complexity. However, as the time progressed, they got several platforms where they could sell from anywhere and at any time like a regular shop. They can attend to their customers through calls and video calls, which is not very different from a regular shop. They were also getting contactless payment receiving and delivery solutions, which was difficult for them to get. The local sellers are now more digitised through the dukaan tech model and are still serving the customers with their known way of selling.
There is a major reason for the unorganized sector's huge number of consumers. They are the oldest and most basic type of retail, requiring little initial investment and being readily available on every street and tea shop. Therefore, it is so simple for consumers to buy from them. However, people are also becoming more accustomed to the convenience of online shopping. Therefore, they want to purchase from the comfort of their own homes, and it would be the cherry on the cake if it came from their trusted local vendors. Some businesses, following the Dukantech model, provide mostly local vendors on their platforms, which is a unique and smooth approach.
Unorganized retailers are now going online by collaborating with software firms in order to provide their existing consumers with the same degree of ease that online aggregators provide. To respond to the changing expectations of the Indian customer, many of these merchants will embrace innovative and cost-effective technology in the coming decade. They have a lot more interesting years ahead of them because of their large market coverage, ease of providing products, and good relationships with customers.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
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