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After record FDI in 2018, retail sector gears up for more M&As in new year

With the lines getting blurred between organised brick-and-mortar model and new-age online platforms, retail sector is ending the year 2018 with a record level of FDI and is gearing up for more mergers and acquisitions, partnerships and other deals in the new year.

According to the sector experts, the year 2018 brought big tickets investments across all formats while bridging the online and offline divide to bring their customers closer and the trend may continue further.

The sector, which employs over 60 million people and received one of the largest FDI in 2018 would continue to invest on supporting tools like data analytics, virtual reality and artificial intelligence to boost trade volumes, while new tie-ups, innovative thinking and accelerated adoption of omni channel systems should also become order of the day.

With young demographics, increasing disposable income and digital payment-assisted consumption acting as key enablers, the retail sector expects to be more consumer-friendly, while competition may grow manifold to lure customers.

There have been several other deals and many more are in making.

Amazon is also believed to be in talks with Kishore Biyani-led Future group to pick up stake.

In 2018, the sector came back from the double shocks of GST and demonetisation and Talreja beleives it would be setting a “new normal for the future”.

Moreover, the role of small kirana/mom & pop stores would continue to increase and many of them would tie up with big retailers.

Besides, retailers also expect standardisation in labour laws across states to keep pace with modern business realities and still see land acquisition as a big challenge for large format store.

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