RETAIL HOSPITALITY AND SURVIVAL OF THE FITTEST - A STUDY ON UNORGANIZED INDIAN RETAIL SECTOR

Around 70% of Indias population lives in 627000 villages. Retailers both in small and large formats are targeting these untapped markets since rural India has a large consuming class with 41% of Indias middle class and 58% of the total disposable income. At present, Rural India accounts for 55% of the total retail market ($450 billion) and it is expected to grow by $ 90 billion in the next 5 years. The organized retailing has grown from 2% in the year 2000 to 5% in 2010 and the future growth rate has been estimated at about 35% per annum. Even though there are plenty of efforts from the government of India in improving the countrys GDP through uplifting rural infrastructure through the 5-year plans, no major development has been recorded yet. This is considered to be a major barrier for the entry of large retailers to these markets who are trying to explore new venture to overcome current economic slowdown. Also, the robust presence of Kirana shops and their personal bonding with the rural customers in the neighbourhood villages gives strong competition to these retail giants. This paper attempts to explore the factors supporting the presence and growth of Kirana shops in rural India and consequently analyzing the major challenges in front of the large retailers like HUL and ITC to establish their presence. The paper is conceptual, representing the various facts and information obtained from the online journals, newspaper articles, and surveys by research scholars and various paper publications related to retailing.