Good news for retailers! Earlier this week, the government announced that single-brand retailers with FDI can now directly sell online.
So far, FDI policy in B2C retail didn’t allow single-brands to sell online directly. This is why retailers relied on ecommerce marketplaces such as Amazon, Flipkart to enter the online space.
Now with this new move, companies such as Adidas, Swatch, and Marks & Spencer will be able to expand their ecommerce arm without specific permissions. Indian manufacturers with FDI such as Fab India will also get an opportunity to sell their entire range of products post this policy change.
Adidas India’s MD, Dave Thomas affirmed, “It is a positive step to boost the growth of e-commerce in India. We will study the fine print of this before we can comment on the next steps for Adidas and Reebok.”
Retail expert and Technopak’s founder Arvind Singhal also believes, “The relaxing of norms could enthuse many MNCs to enter India. They can open a few physical stores with minimum investment and build a strong online presence to do business here.”
The mandatory rule of sourcing 30% goods locally levied on FDI retailers still remains. But the sourcing time-limit has been relaxed a little. Instead of counting the sourcing days from the date of receipt of FDI, the clock will start now from when the first store opens.
This has made brands like IKEA, which is all set to open its first Indian store in 2017, very happy. Ikea released a statement that stated, “To start counting the time to comply with the 30% local sourcing norm from store opening will support brands in building long-term sustainable supply chains that are good for India, good for the businesses and will enable better prices to the Indian customers.”
It further mentioned, “Allowing the e-commerce channel of sales is a salute to today’s modern consumers who expect their favourite brands to be available whenever and wherever they want and today’s decision will allow the Indian Ikea customers to interact with the brand Ikea in the same way as all Ikea’s global customer.”
Relaxing FDI norms will definitely give boost to the Indian retail sector. Access to funds will allow local brands to sharpen its operations. In addition, allowing international single-brand owners to enter ecommerce will also accelerate the growth of etail industry
Editor team is specialized in introducing the marketplace content targeting the Indian online sellers. They plan and coordinate to bring the appealing content for the small businesses on how to partner with the e-commerce sites like Amazon and Flipkart and strategies for improving their online business.
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