IT traders hit by MCD sealing

Zia Askari New Delhi, Sep 20

The 'sealing effect' of Municipal Corporation of Delhi (MCD) has made
sure that renting or leasing rates in authorized places like the IT hub Nehru
Place jump multifold, adding to the irony of already puzzled IT traders of the
region

This festive season of Dussehra and Diwali is likely to bring less cheer to
traders involved into selling IT products and equipment, irrespective of the
fact whether they operate from dubious places or have their offices in
well-organized localities like Nehru Place. The two-pronged side effect of
MCD's sealing activity has not only ensured the sealing/closure of the
premises but has also made the rent rates in legal areas skyrocket.

“It is very surprising to see that the recent episode of sealing has
witnessed some of the highest increases, when it comes to renting or leasing
one's own property, in authorized places like Nehru Place-the IT hub of this
region. In some cases where the shop location is really good, people are
increasing their rent or lease agreements by 150 to 200 percent. Original
allotment for Nehru Place was done long time back in the 1978-79, so most of the
IT traders today work here from a rented place,” informed, Saket Kapur, CEO of
Nehru Place-based Green Vision.

The two-pronged side effect of MCD's sealing activity has not only ensured the sealing/closure of the premises but has also made the rent rates in legal areas skyrocket

Speaking about different repercussions of this situation, Anil Sachdeva, CEO
of Nehru Place-based Kadam Marketing, said that in one way the appreciating
value of real estate is a good phenomenon but the situation is going to be quite
difficult for small traders who are involved in 'rotation' business. “Yes,
I agree that this MCD sealing activity has helped people increase the rent or
lease amount for their property. The good thing is that this is a temporary
phase and is will also mean that only serious people will be able to survive
this situation,” he added.

Ongoing MCD sealing activity is also likely to put brakes for IT companies
eyeing Delhi for high sales when it comes to cashing in on the upcoming festive
season of Dussehra and Diwali.

“Certainly there would be some affect of this on the upcoming festive
season. There is this increased rent rate for most places like Nehru Place. Over
1,000 traders over here at Nehru Place are running their businesses in rented
places, so they are going to face big problems due to the skyrocketing rent
rates. While vendors will be eyeing this season for growth, they will have to
keep in mind the current difficult situation for these IT traders,” informed,
Shyam Modi, CEO, Modi Peripherals.

What vendors say!

When it comes to having a big retail presence, LG Electronics India has got
a lot of dealers based in and around Delhi but the company feels that the MCD
sealing will not have major affect on its overall IT business activity.

“If you look at our component business, nothing big will happen as most of
our partners are based in authorized marketplaces like Nehru Place. Keeping in
mind the upcoming festive season, yes, retail will be affected but not to a
great extent. We have taken extreme care while deciding the location of our
'Cyber Shoppe', so we do not need to worry about those. We know that it is a
difficult time for some people who are being affected by this rise in
renting/leasing or MCD sealing. We are ready to engage with them to re-brand
their relocated shops and premises,” informed, R Manikandan, GM-Sales and
Marketing (IT Division), LG.

When contacted Samsung India's official spokesperson said that the
company's IT business is not likely to get affected, however, there would
certainly be some portion of consumer electronics and home appliances business
that will be hit by this situation.

“All our IT dealers are based in commercial and legal areas and none are
based in residential localities. Hence, Samsung will not see any dip in IT sales
because of the MCD sealing. But still there is this question of trader's
sentiments being hurt, because of the overall trader community being affected.
As far as festive season is concerned we are quite upbeat about it and feel that
consumer buying will really kick off by 25th of this month,” the spokesperson
added.