The Hindu Business Line : Regulatory concerns, high realty prices continue to dog retail sector

Hyderabad, May 6 The Indian retail industry, estimated at about $400 billion, continues to face some regulatory challenges in the area of licenses, clearances and taxation and spurt in realty prices, according to Mr Gibsom G. Vadamani, Chief Executive Officer, Retailers Association of India.

The real estate prices have shot up in the last three-four years, requiring significantly higher investments as the retailers expand their footprint in the country.

While rising real estate price is a major issue, with some retailers making investments in future expansion about 24 months ahead of their business plans, some other large format stores are turning anchor tenants, he said.

Speaking at the two-day ReTechCon hosted here, Mr Gibson said “Retailers continue to face regulatory challenges. For instance, when a retailer expands to a new State, he is required to secure licenses and about 30 clearances and (is) faced with taxation issues.”

“As an association, we believe that this needs to be simplified. We are meeting with representatives of the Government and making representations on these concerns,” he said.

Transitory phase

Mr Ushir Bhatt, Executive Board Member of Future group, said that the Indian retail industry is passing through an interesting transitory phase.

Unlike some of the matured markets, retailers in India do not have legacy IT infrastructure. Therefore, they have the potential to create global case studies for others to emulate.

The Chief Information Officer of Coles Group, Mr Peter Mahler, who represented the Australian retail chain with over 3,000 stores, explained how the company transformed itself to a highly technology-driven integrated company.

The Microsoft’s Retail Industry Executive, Mr Jan De Jong, explained how the technology sector and retailers across the world are working towards bringing common standards which will make the technology simpler to drive the retail industry.

The Vice-President of Cisco India, Mr Jagdish Mahapatra, said with nearly 300 million mobiles phones, India could become an innovative model where payments could be processed through mobile phones. This is significant as about 50 per cent of the phone users are the youth and a majority of them do not have credit cards.

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