Sports giants Adidas and Puma have requested permission from the Indian government to operate through ecommerce, which would see the German sports makers become the first foreign company to make the most of the change in law that allowed single-brand overseas retailers to sell online as well as in physical stores in India.
Speaking on the news of their move, Abhishek Ganguly, managing director of Puma India said: “Based on the new regulation on single-brand retail, we have sought approval for Puma Sports India to do retail and ecommerce. The same entity was originally allowed to do wholesale of Puma products.”
As of March 3rd, both Puma and Adidas had filed an application with the Department of Industrial Policy & Promotion (DIPP), the nodal agency for foreign direct investment in India.
In November last year, the government announced that they had relaxed the rules for FDI in retail, which meant that manufacturers were then permitted to sell their products via wholesale, retail and ecommerce channels, a first for the country.
The DIPP further said in its announcement, “FDI policy on the SBRT (single-brand retail trading) provides that retail trading, in any form, by means of ecommerce, would not be permissible. It has been decided that an entity which has been granted permission to undertake SBRT will be permitted to undertake ecommerce activities.”
The move has led to retailers supporting the policy change as it is believed that it will help streamline business operations, similarly to how successful ecommerce operations function here in the UK.
“The government’s new FDI policy on single brand makes things easier and simpler for a foreign entity to invest in retail.
It will bring efficiency in supply chain, inventory, sourcing and generating employment in retail,” Ganguly of Puma said. “It’s a very progressive approach from the government. Once our approval comes through, it will make business much smoother for us.”
Adidas had in November 2015 announced its intent to open its first fully-owned outlet in India in the second half of the fiscal, after it got clearance to invest in local retail operations.
Media Lounge will be keeping a close eye on how things pan out, as this may lead to other big businesses capitalising on the new law change. In the meantime, if you need any help with Magento UK support, we’re on hand to help you!