Consolidation in an industry can be a good thing, sometimes, too much of a good thing. What it is going to be in India’s retail sector is shaping up at present. It would help if the playing field is level and regulatory oversight ensures that competition remains keen and rules strictly enforced on network neutrality, fair rules for data sharing and equitable treatment of all customers.

Future Group’s sale to a larger players seems imminent. While Amazon has a stake in the company, it is probably JioMart that is going to pick it up. Walmart’s cash-and-carry business in India is being reverse-merged with Flipkart, Walmart’s subsidiary in India. Both developments are a result of regulatory restrictions on foreign direct investment in retail. Future Group, a pureplay domestic retailer, cannot deploy the kind of capital that its online rivals Amazon and Flipkart can, in their retail operations. Retail is retail, its bifurcation into online and physical is a regulatory contrivance that serves to starve physical retail of the benefit of foreign capital on par with online retail. It also restricts domestic players in the field to really large companies like Reliance, which can summon comparable financial resources. But the question is not just of capital. Retail is increasingly a business in which the ability to analyse data and project tastes and trends and personalise advertising will provide the competitive edge. What this means is that small players can survive only if they are very nimble and can make deft use of the host of technology firms, mostly startups, that severally offer the different services required for such analytics that large, tech giants combine under a single roof.

Pure online and pure physical are giving way to hybrid models. Communications and data add to supply chain management skills in determining success. This is where network neutrality and a rational policy on data become key ingredients of fair play in retail. In sum, regulatory oversight in modern retail goes beyond the size and abuse criteria traditionally used by competition bodies.