FDI/Organised Retail vs. SME Segment in India

Abstract

Consumers around the world continue broad efforts to save money while shopping for the consumer packaged goods. Low prices and getting good value for money has been the highest priority, India is no exception to this. The Indian SME segment played a very significant role in the overall industrial development of India. With its agility and dynamism the sector has shown admirable innovativeness and adaptability to survive the recent recession and down-turn. Small and medium enterprises (SMEs) have been considered one of the ‘driving forces’ of modern economies due to their multi-faceted contributions in terms of technological innovations, employment generation, export promotion, etc. Of these, the ability of SMEs to innovate assumes significance because innovation lends competitive edge to firms, industries and, ultimately, to economies. The unorganised retail sector employs the second largest workforce in India after Agriculture and it has already proved its sustainability and resilience over the domestic organised retail sector, for example, BigBazaai; Pantaloon and so on. Now this segment is poised to face the international retail giants heads on - such as WalMart, Tesco and Costco. India is emerging as the consumption giant next to China, irrespective of the global market down-turn and the European Market melt-down. This exploratory research reviews the Indian middle class segment known as the power-house of this huge consumption in Indian retail segment which, in turn, would shape up the SME segment based upon the literature review and consumer segmentation analysis with respect to the Vals2 scale and the relevance of organised retail vis-a-vis the SME segment growth with the employment generation and the emergence of the Indian middle class segment.