Retail Operating Models in Indian Agri-business Sector

Abstract

The emerging economies constitute approximately 80 per cent of the global population and 20 per cent of the world economy, are going through a transformation phase due to the effect of globalisation. The effect is visible not just in metros but in rural markets also, particularly in the retail sector in India. The paper focuses on the growth of rural retail in India and changing face of rural marketing. The study was undertaken to know how the corporate giants tapped the latent potential hidden at the bottom of pyramid. ITC has come up with an innovative idea of 'Choupal Sagar' in rural areas of Madhya Pradesh; HUL is using its Project 'Shakti' initiative, leveraging women self- help groups to explore the rural market, which proves that big companies are ready to experiment to gain more and more market share. These companies understand that the success of organised retail in any country depends upon developing innovative retail formats according to the needs of that particular country and not merely by imitating the successful formats of other countries. Following suit, in the race are major Indian players like Godrej 'Aadhar', DSCL's 'Haryali', Cargill 'Saathi', Tata's 'KisanSansar' etc.

Today looking at the point of saturation in the urban markets, it is wise to step into the rural markets to tap the vast unexploited potential at the bottom of Pyramid. So the basic rationale behind this paper is to understand the reason of venturing into the retailing and to analyse the system of working of different models that are operational in agri-business sector and rural marketing. This study also addresses the factors which result in more number of footfalls like providing consultancy services, assistance in shopping experience and providing a one-stop solution to the end consumers. Not only forward linkage but an integration of both forward and backward linkage (like procurement of the farm produces thus giving a better earning choice to the farmers) is the basic objective of any rural retail giant.