India has around 13 Million retail outlets which makes it the world largest retail zone. From such a huge retail zone 12 Million retail outlets are unorganized. And a chain of 1 million is organized retail outlets. Being very dynamic in current sensitive environment, Indian market still has an opportunity to cater a market size of INR 31 trillion (USD 543billion) which contributes 14 to 15 percent of India’s GDP. It has been found out that every 11 shops cater approximately 1,000 people in India. But the productivity per outlet is low as compared to other peer countries.
Most of the retail outlet which is not integrated lays under tier 2 and 3 cities of India and contributes more than 60% of the market size. Most of the retail outlets are operating in the form of traditional business like kirana stores, medical shops, hardware, dairy, telecom/mobile accessories shop, local corner shops etc.
Many FMCG companies target such Indian retail outlets for pushing their products for walking customers at their outlet. The percentage share of the unorganized retail outlets catering to food industry is 70% and 30% to clothing. The earning on gross product is 5% as most of the margin is taken by the middlemen that leads to poor growth in retail segment.