One Person Company (OPC) - The new business format for small retailers in India
The retail sector in India is undergoing transformation due to the changing lifestyle of people. The sector is generally characterised by small retailers who conduct business in a traditional manner. But recently there has been a shift towards modern retailing, since education and exposure to contemporary trends have made the Indian consumer look for more professionalism in shopping. This has prompted many corporations (both Indian and foreign) to enter into this sector with the modern retail formats, such as supermarkets, department stores, shopping malls etc. This trend towards organized retailing can be a threat for small retailers. This article discusses One Person Company concept as a strategy to develop small retail businesses in terms of their corporate status.1. INTRODUCTIONThe retail industry is one of the fastest growing sectors in India. It accounts for over 20% of the country's Gross Domestic Product (GDP) and contributes 8% to total employment (Thambala, 2013). It is currently estimated at around US$490 billion and is projected to grow at a Compound Annual Growth Rate (CAGR) of 6 % to reach US$865 billion by 2023 (India Brand Equity Foundation, 2014). India is the 5th largest retail market in the world and the country ranks fourth among the 30 surveyed countries in terms of global retail development (Retailing Sector Analysis Report, 2013). The retail industry comprises of different segments like food and grocery, clothing and textiles, consumer durables, footwear, furniture and furnishings, catering services, jewelry and watches, books, music and gifts, mobile handsets and others. Food and groceries is the largest category within the retail sector with 60 % share followed by the apparel and mobile segments (Indian Retail Sector: Industry Profile, 2012).The retail industry in India is broadly classified into organized and unorganized segments. Organized retailing refers to modern retailing with multi-storied shopping malls, plazas and huge complexes that offer a large variety of products in terms of quality and price, while the unorganized retailing refers to traditional retailing through small shops. In India, the unorganized segment is very large (92%) and dominates the Indian retail market (Deloitte, 2013). It is expected to grow by 5% and reach US$650 billion by 2020 (Federation of Indian Chambers of Commerce). This segment is generally characterized by small retailers such as owner-operated general stores, convenience stores, kirana shops, street vendors, etc. The sole proprietorship is a common form of business in the unorganized segment. As of 2013, India's retailing industry was essentially owner-manned small shops. The larger format convenience stores and supermarkets are present only in large urban centers in India. In 2010, they accounted only for about 4 % of the industry (Accha, 2013). But in recent years there has been a shift towards organized retailing in India, largely due to increased purchasing power, exposure to western culture, brand awareness, growing middle class and the creation of nuclear families (Handa & Grover, 2012). The growing demand for organized retailing has attracted many corporations into this sector. Large business tycoons, such as the Tata group, the Aditya Birla Group, Reliance Communications etc. have entered into this sector. Indian retail sector has been attracting foreign retailers too. The Foreign Direct Investment (FDI) policy on retail has facilitated foreign retail companies to enter the country. This has created an upheaval among small retailers as they have had to face competition from two sides, one from large domestic firms and the other from foreign retailers (Joseph et al, 2008).At this point, the concept of One Person Company (OPC) recently introduced by the Indian Companies Act 2013, discussed as a possible step to corporatize small retailers by integrating them into the organized segment. Secondary sources of data, i.e. published reports, articles and survey results are analyzed in the paper. …
A STUDY ON ORGANIZED RETAILING AND ITS CHALLENGES AND RETAIL CUSTOMER SERVICES
India is becoming most favored retail destination in the world. Today retail sector contributing 10% to countryâ€™s GDP. Indian retail industry is ranked among the ten largest retail markets in the world. The change of attitudes of Indian consumers and the emergence of organized retail formats have transformed the face of retailing in India. Organized retailing offers huge potential for future growth of retailing in India. This paper provides information about the growth of retailing in India. And also focuses on the challenges faced by organized retail sector in India. It also emphasize on major players of retailers in India and customer services provided by the retailers. This paper also deals with various retail formats and the opportunities for the growth of retail industry in India and also provides some suggestions to overcome the challenges.
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