6 September 2024 12:21 am Views - 677
Key delegates at the 21st Asia-Pacific Retailers’ Convention & Exhibition in Colombo. Pic by Kithsiri de Mel
By Nishel Fernando
Sri Lanka’s resurging retail sector which is undergoing a significant transformation is well positioned for a take-off supported by recent developments, according to Sri Lanka Retailers’ Association (SLRA).
Sri Lanka, the host of the on-going 21st Asia-Pacific Retailers’ Convention & Exhibition (APRCE) is eyeing to attract the spotlight on its resurging retail sector from the most prestigious and influential retail professionals in the region who are gathered in Colombo this week.
Organised biennially by the Federation of Asia-Pacific Retailers Associations (FAPRA), the event stands as the largest and the longest-running retail convention and exhibition in Asia, bringing together leading visionaries, innovators, and professionals from diverse backgrounds for a premier platform of networking and industry insight. The three-day APRCE kicked off in Colombo on Wednesday under the theme of ‘Redefining Retail in APAC: from Transactions to Transformation’.
The gathering has attracted over 650 delegates including over 350 foreign participants in particular with a strong presence from China and Japan.
SLRA President Charitha Subasinghe underscored that Sri Lanka’s retail sector is undergoing significant transformation, reflecting broader shifts in the economy and consumer behaviour. Driven by infrastructure advancements, policy improvements, evolving consumer trends and also supported by the recent surge in tourism sector, he was upbeat that the retail sector is well positioned for a take-off.
Though there is a lack of detailed statistics, insights from the services sector and the Purchasing Manager’s Index highlight the sector’s importance. The wholesale and retail sector contributed 14.1 percent to the country’s GDP in 2023, with a marginal growth of 0.14 percent compared to the previous year. The sector also contributes to over 15 percent of the workforce in the country, according to SLRA.
Highlighting infrastructure advancements , Subasinghe pointed out that Infrastructure advancements such as improvements in transportation and energy are contributing to enhancing retail operations while noting that mega development projects such as Colombo Port City and urban projects are in a similar fashion set to open new commercial opportunities and boost supply chain efficiency.
The SLRA also views the government’s focus on expanding industrial estates could potentially stimulate retail growth by increasing disposable income and creating new consumer markets.
In addition, it emphasised that recent trade policy improvements, including new Free Trade Agreements (FTAs) and relaxed import restrictions, have also positively impacted the sector by improving product availability and reducing costs.
Meanwhile, SLRA highlighted that the resurgence in tourism marked by a significant increase in arrivals that could further fuel the retail growth, offering new consumer opportunities.
Overall, it acknowledged that the private consumption remains a as the major driver for the sector, despite recent economic challenges which resulted in a contraction of private consumption. Moving forward, Subasinghe was optimistic of future growth in private consumption with improving macroeconomic stability.
Moreover, SLRA noted that the rise of e-commerce and small and medium enterprises (SMEs) is also contributing to reshape the retail landscape, presenting both opportunities and challenges.
Sri Lanka’s retail sector consists of fast moving consumer goods (FMCG), clothing, fashion and jewelry, shelter & housing, household and consumer durables, footwear and accessories, e-commerce, mobility, entertainment and healthcare and wellness.
The value added by this sector is influenced by fluctuations in domestic production and imports, making it growth dependent on changes in domestic agricultural and industrial production, import and export tariffs, government taxes, investment policies and private consumption levels.
Moving ahead, SLRA underscored that main challenges for Sri Lanka’s retail industry includes economic uncertainty, continuous presence of anti-competitive business practices (price controls, protectionist tariffs, para tariffs and practices tailored to favour certain entities in government procurement process) and implication of tax amendments.
The industry has overcome significant challenges over the past few years, and the cost of living crisis that is impacting global retailers has brought with it a unique set of challenges. During the course of this event, the industry stakeholders are expected to explore avenues to navigate the retail landscape, harnessing the power of technology, sustainability, and consumer-centric approaches to drive growth and foster meaningful change.