Opportunities Vs Threats

Opportunities Vs Threats

 “Organised Food Retailing: A Blessing or Curse” Summarized

   The article “Organised Food Retailing: A Blessing or Curse” is about the entry of organised retailing in Indian would create many winners and loser during the process. However, “there are more winners than losers in the process” (Kumar, Patwari and Ayush).

With the growing of economic in Indian, the food retailing industry continues to grow rapidly and the organised retail is occupying more and more marketing shares. The food retail market is made up with Kirana store which is a traditional retail industry that owned and run by family members, operated in small space by carrying limited items, Pushcarts vendor and organised retail, therefore, the growing of the organised retail would create more threats to both Kirana store and Pushcarts vendor, and since the Kirana store has higher net margin than others, the entry of organised retail would make Kirana store as the bigger loser than Pushcarts vendor. However, the effect of the entry of organised retail is limited since Kirana store’s target consumers are low income group and organised store’s target consumers are middle income group. Although organised retail’s competitors are facing more threats, others members from the supply chain are getting more opportunities, such as the farmers and consumers.

Based on the traditional supply chain process, if the consumer wants to buy the farm product from the farmer, the product would have to go through the trader, commission agent, wholesale, retailer and then the consumer. Fortunately, the entry of organised retailing helps to change the regulation, especially the supply chain process. The revamped supply chain would get rid of the trader and commission agent, and help the supply the chain process to reduce the costs, the farmer will be able to gain more profits from the new supply chain process and consumer could save some costs from the new process too. However, the entry of organised retailing might only benefits to those larger farmers since they have more bargain powers. Not only the farmer will gain more profits, but also the wholesaler will gain profits by reducing the cost of the products.   The entry of organised retailing will also benefit the employment and tax collection for government. Comparing with unorganised retailing, organised retail does not have employment rate percentage as much as unorganised retail does, but it is still growing rapidly, also organised retail “has 65-70 percent higher productivity” than unorganised retail. Organised retail will also help the government collect more taxes based on its 30 percent of total food retail market.

    Opportunities and threats are always involved in a business venture. From the article, the authors defines Kirana store and pushcart vendor as the “losers” since they are all facing the threats from the entry of organised retailing; the farmer, consumer, wholesaler, employee and government are defined as the “winner” since all of them have more opportunities after the entry of organised retailing. The entry of organised retailing has brought more opportunities than threats.

Citied

Vijay Kumar, Yogesh Patwari and H. N. Ayush. Organised Food Retailing: A Blessing or a Curse. Economic and Political Weekly , Vol. 43, No. 20 (May 17 - 23, 2008), pp. 67-75

Article Stable URL: http://www.jstor.org/stable/40277692