According to Sengupta, there are several reasons for the
exponential growth of the organized retailers. The liberalization and globalization
has given an opportunity to several small and large national and
international players vying for shelf-space in the retail stores. The
time-constrained double income educated middle-class customers have a growing need
of combining shopping experience with entertainment. To add to
the entertainment value, there are these new retail chains, which cater to
the Indian ethos of buying by `see-touch and feel'. They satisfy the need
for hygienic goods by providing clean pre-measured food in sealed clean packets. The emergent malls are
including food courts, video parlors, book stores, cinemas and theaters to add value to the entertainment factor. To
attract customers from all sections of society, they are trying to include all kind of brands in the stores, including
mass brands as well as high-end products add value to their money.
According to Global Retail Development Index 2009, India tops among the emerging global retail
markets. With a GDP growth rate of 7.1% in 2008-09, (according to Interim Budget 2009-10) and low inflation rate,
retail business in India has really picked up. The lowering of rent of retail outlets in malls by 15-20% in tier I cities
has further promoted retail business. The opportunity provided by the government by allowing 51% Foreign
Direct Investment (FDI) in single-brand retailing to upto 100% FDI in cash and carry wholesale retailing, was used
by domestic retailers, to provide customers with the choice of international brands and services. For
instance, Madura Garments of Aditya Birla Group partnered with French chain Jean-laude Beguine to set up
salons within its collective stores. Westside—a unit of Trent Ltd., the retail wing of Tata group set up a joint
venture with Inditex Group to promote and develop Zara and UK-based fast-fashion sensation, Topshop. While
organized retail segment is at its growing stage, another form of retail business, which is taking fast strides
is—e-retailing, which has grown by 50% the world over last year according to Retail Barometer Report, 2009. Recession
has contributed to its growth, due to the convenience, low cost of transaction and reduced time
requirement, specially among double income blue-collared population. The rise of e-retail and organized retail segment
have not been able to sweep away the traditional mom-and-pop stores
(kirana shops) as feared, especially in the
rural areas as they offer groceries and other items of daily needs on credit, offer home delivery and are aware of
the needs of the local population. In this background, this article intends to study the risks retail businesses are
facing in India and the securities and provisions available to counter them. The article discusses the risks
retail businesses face due to terrorism, shoplifting, e-commerce frauds, etc. and corruption in that order and steps
to prevent them. The article is based on studies and reports on retail business from national and
international sources, the Insurance Regulatory and Development Authority of India (IRDA) annual report as well as
from the products offered by different insurance
companies. |
