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RETAILING

The Retailing is a distribution channel function, where one organization buys


products from supplying firms or manufactures products themselves, and then sells
these directly to consumers. The word retail is derived from the French word
retailer, which means to cut off a piece or to break a bulk. Retail may be defined,
as a ‘dealer or trader who sells goods in small quantities or one who repeats or
relates.’ Retailing thus may be understood as the final step in the distribution of
merchandise for consumption by the end consumers. Kotler states that “Retailing
includes all the activities involved in selling goods or services to the final
consumers for personal, non-business use. A retailer or retail store is any business
enterprise whose sales volume comes primarily from retailing. Any organization
selling to final consumers whether it is a manufacturer, wholesaler or retailer – is
doing retailing. It does not matter how the goods or services are sold (by person,
mail, telephone, vending machine, internet or where they are sold – in a store, on
the street or in the consumer’s home.
Organised and Unorganised Retailing

The retail industry is mainly divided into:- 1) Organised and 2) Unorganised


Retailing

Organised retailing refers to trading activities undertaken by licensed retailers, that


is, those who are registered for sales tax, income tax, etc. These include the
corporate-backed hypermarkets and retail chains, and also the privately owned
large retail businesses.

Unorganised retailing, on the other hand, refers to the traditional formats of low-
cost retailing, for example, the local kirana shops, owner manned general stores,
paan/beedi shops, convenience stores, hand cart and pavement vendors, etc.

The Indian retail sector is highly fragmented with 97 per cent of its business being
run by the unorganized retailers. The organized retail however is at a very nascent
stage.

Indian retail market is the fifth largest retail destination; globally and owns the
credit of being ranked as an attractive market for retail investment by AT Kearneys
eighth annual Global Retail Development Index (GRDI). Retail industry is the
largest segment in India, employing about 8% of the workforce, and contributing
more than 10% of the countrys GDP. During the past decade, retail industries have
built up strong lifestyle brands positioning themselves to cater to the tastes and
preferences of their consumers and utilizing the increasing income of the end users.
With the economy recovering faster than anticipated, there is a drastic change in
the consumer spending patterns.

The retail scenario is one of the fastest growing industries in India over the last
couple of years. India retail sector comprises of organized retail and unorganized
retail sector. Traditionally the retail market in India was largely unorganized;
however with changing consumer preferences, organized retail is gradually
becoming popular.

Unorganized retailing consists of small and medium grocery store, medicine stores,
paan shops etc. More than 90% of retailing in India fall into the unorganized
sector, the organized sector is largely concentrated in big cities. Organized retail in
India is expected to grow 25-30 per cent yearly.
Pharma
Market overview

As per report by All India Organisation of Chemists and Druggists (AIOCD), the
Indian pharmaceutical market posted annual sales of Rs 53.69 billion in fiscal
2018-2019. There are approximately 700,000 pharma retail outlets, out of these
only 20 to 30 per cent is from all the organised retail companies and rest is
dominated by traditional/local chemists. Modern pharmacy market has seen a
significant growth with large scale investments made by Indian pharma companies
in the past few years. Whereas the recent govt decision to liberalise foreign direct
investment (FDI) in the retail sector will open doors for many international players
to set up pharmacy retail chains via different business models including
franchising. There are plenty of opportunities for the pharmacy players to grow in
Indian market.

At present Indian pharma sector is relatively unorganised. With entry of branded


pharma retail chains the industry is expected to get more and more organised in the
future. At present, there are a few big players such as Guardian Lifecare’s
(Guardian Pharmacy), Ranbaxy’s (Fortis), Reliance Retail’s (Reliance Health and
Pharma), Apollo Hospitals Group’s (Apollo Pharmacy), Zydus Cadilla’s (Dial for
Health), Morepan’s (Life Spring), Surya Pharmaceutical (Viva), Lifetime
Healthcare’s (LifeKen), MedPlus who dominate the organised pharmacy retailing.
Organized medical store

Apollo Pharmacy

A subsidiary of Apollo Hospitals Enterprises Ltd is India’s first and largest


branded pharmacy network, with over1500 store across India. It is accredited with
International Quality Certification. An Apollo pharmacy franchisee who fulfils all
the financial requirements and other qualifications as per the company’s franchisee
qualification criteria can expect ample training and support that will provide
complete know how of pharmacy retail business.
Unorganised medical store

Shri sai medical store

The unorganized sector consists of all private enterprise, having less than ten total
workers, operating in proprietary or partnership basis. It takes a majority of Indian
food processing market as opposed to the organized sector, which only holds a
share of 48%. Unorganized sector includes lowcost retailing such as medical store,
owner-manned general stores.