Fragmented distribution Channel
There is a dearth of third-party logistics service providers and in some states, integrated supply network and 3PL services are entirely missing. The distribution chain is fragmented and is marked by the presence of a large number of intermediaries. The logistics cost in India is high – a Planning Commission study estimated that approximately 14 per cent of a product’s cost represents logistics-related costs. This makes it difficult and costly to have an efficient supply chain which is the key to success of organised retail. retail is regulated by multiple agencies and a typical food and grocery retailer has to obtain 40-50 licenses to set up operations for each store. A number of corporates are facing shortages of talents and they have to set up in-house training facilities to develop skills.