Any study concerned with the political economy of selling would have to confront the fact that in most urban spaces around the world, and especially in developing countries, much of the selling happens beyond the purview of the state, in a semi regulatory environment of the informal sector of the economy. Although I would analyze the concept of informal- ity (and its attendant concepts like unorganized, or self-organized), in detail in the next chapter, as a short hand we can say that S2 is overwhelmingly populated by unincorpo- rated private enterprises that often do not have a legal standing distinct from the owner function within the market system, in the sense that some of the goods and services pro- duced are for sale and barter. In terms of informality of employment, the short hand for now can be those forms of employment that do not provide social security and related benefits, or do not resemble the strict wage relation that exists between the factory worker
is popularly called by his customers, has been selling vegetables from his cart in New Delhi’s Bihari Mandi for 15 years. However, in the last one year many of his customers shifted to buying vegetables online and this was affecting his sales. That was when an acquaintance told Guptaji about BigZop.com, an online grocery store. It is the latest entrant in the world of hyper local players, who are helping small vendors and neighbourhood kirana stores to compete with their bigger offline and virtual peers. A month after the tie-up with BigZop.com, Guptaji got back his old customers and the sales increased two-fold. “Ini- tially it was difficult to convince him to get him on our platform but now it has finally turned out to be a success story for both him and us,” says Aaditya Goyal, an Indian Institution Technology, Kharagpur alumni and founder of BigZop. “We hope to reach 100 orders per day with his support in no time. Our experience with Guptaji is helping us develop a platform that can be used by people across the country whether they are from cities or villages,” adds Goyal. BigZop.com, which was founded in Gurgaon early this year, started its services by delivering hand-picked fresh fruits and vegetables to consumers’ doorstep at their chosen time within two hours. In four months, the start-up has build technology for hyper local e-commerce and is expanding its services to edibles and household products. See (Pani 2015).
47(Uberti 2014) reports “dying shopping malls are speckled across the United States, often in middle-
class suburbs wrestling with socioeconomic shifts. Some, like Rolling Acres, have already succumbed. Es- timates on the share that might close or be re-purposed in coming decades range from 15 to 50%. Amer- icans are returning downtown; online shopping is taking a 6% bite out of brick-and-mortar sales; and to many iPhone-clutching, city-dwelling and frequently jobless young people, the culture that spawned satire like Mallrats seems increasingly dated, even cartoonish.”
and the owner.48 According to some estimate informal workers constitute half the global
workforce.49 Most of the entities and economic transactions within S2 are not recorded or
regularly monitored and/or directly taxed by the state.
To gauge the extent of this lack of visibility of economic transactions, for example, let us consider “the fifth largest global destination in retail space,” India, where “Organized retail penetration (ORP) is low (8% in 2015 compared 85% in the United States”).50 In India the business of selling, or the retailing industry, is the second largest employer after agriculture. It is also the largest industry with the highest retail density in the world: 15 million outlets as compared to 0.9 in the US.” With a compounded annual growth rate of 7.46% since 2000, contributing 10% of the GDP and 8% of employment it seems the mar- kets are profitable and growing rapidly.51 This means that much of the business of selling
in India remains overwhelmingly within the unorganized sector. In a widely referred study (Sengupta, Kannan, Srivastava, Malhotra & Papola 2007, p.7) defines the unorganized sec- tor as
All unincorporated private enterprises owned by individuals or households engaged in the sale and production of goods and services operated on a proprietary or partner- ship basis and with less than ten total workers.” According to this definition, these unorganized enterprises “have no legal personality of its own (other than the person who owns it); it is small in employment size and, more often than not, associated with low capital intensity and labour productivity. The diverse nature of these enter- prises is often a response to the demand for a variety of low-price goods and services produced in different modes of self-employment, unpaid family labour and wage work (often concealed as self-employment).
Similarly (Guruswamy et al. 2005, p.619) understands “Unorganised retailing” to be comprised of “traditional formats of low cost retailing, for example, local ‘kirana’ shops,
48See (Bhalla et al. 2009, p.7).
49(Neuwirth 2012, p.18) argues that 1.8 billion people, almost half the global workforce are involved
in the informal economy that is “neither registered nor regulated, getting paid in cash, and, most often, avoiding income taxes.”
50See (IBEF 2018).
51According to 2018 industry estimates, about 70% of retail revenues are from the sale of food and gro-
owner operated general stores, paan/bidi shops, convenience stores, handcart and pave- ment vendors. . . is by far the prevalent form of trade in India.” Consider these conclusions reached by (Kohli & Bhagwati 2011, p.6).
First, total retail sales increased by approximately 70% between 2004 and 2009, from $294 billion to $496 billion. Second, sales grew over this period by about 43% for re- tailers in the formal sector and about 97% for retailers in the informal sector. The annual average rate of sales growth was about 11% for all retailing, 7.5% for orga- nized retailing, and 14.5% for informal retailing. Thus, from 2004 to 2009, retail sales grew almost twice as fast in the informal sector as in the formal sector and at a sub- stantially faster rate than India’s GDP, which grew at about 8.5% over the period. Third, in 2007, total retail sales in the informal sector surpassed those of the for- mal sector. By 2009, the informal sector held about 56% of retail sales, 8% higher than its 48% share in 2004. These data suggest that informal retailing is more than surviving; it is flourishing. At present growth rates, the gap between formal and in- formal retailing will continue to widen as family-owned stores and street vendors will take a larger share of retail sales.
Not only is retail the highest employer in the service sector, the unorganized/informal component of retail trade has increased over time. Large formal retail chains have started to close in many places in India.52