As the growth of international brands entering the Indian market has been slow but steady for the last three years amidst global economic conservatism and a slowing Indian economy, the new norms have been introduced for international brands. Foreign companies that entered as manufacturing can sell directly to online customers but Foreign companies entering as retailer barred for going online? Another norm states that foreign companies that have entered India as manufacturers will be allowed to engage in e-commerce even if they source products from third-party producers in the country, allowing brands such as Samsung, LG, Panasonic and Lenovo to sell directly online to customers. But overseas firms that arrived in India as retailers will not be allowed to do so by merely sourcing products within the country. This means Marks&Spencer and furniture maker Ikea, among others, which came in as single brand retailers, will not be allowed to sell online in India. “If an entity has come into the country as a manufacturer, then it can do e-commerce even if it is sourcing from third-party vendors. But traders cannot set up e-commerce platforms,” a senior finance ministry official told ET.(Source: http://articles.economictimes.indiatimes.com/2014-07-14/news/51485039_1_e-commerce-lenovo-offline-retailers)
Fashion portals like Myntra, Jabong and others enter partnerships with global, local apparel brands. On the other hand, India’s top fashion portals have sewn up nearly half a dozen partnerships with global and local apparel brands in the past month, as they battle to attract and retain fickle consumers. In the latest such deal, ITC’s Wills Lifestyle brand said it will offer its designer collection on Myntra, which was recently bought by the country’s largest online retailer Flipkart. Myntra also aims to introduce Harvard University Ivy League Clothing on its site in the next few weeks. Since May, Myntra has inked deals with Dutch youth fashion brand Scotch & Soda, designer Rajesh Pratap Singh’s Mario Miranda and Music T Shirt Collection.Rival Jabong signed up London based high street brand River Island in June, following up on earlier deals with another UK-brand Dorothy Perkins as well as designer Rohit Bal. “You will see double-digit growth of exclusive partnerships between now and Diwali,” said Ganesh Subramanian, chief operating officer at Myntra. Flipkart, which plans to invest about Rs 600 crore in the fashion business over the next 18 months, has also entered the fray with a tie-up last month with Japan- inspired UK clothing brand Superdry. Experts are of the view that with a finite number of top brands available, Indian portals are anxious to bag the most partnerships as competition becomes fierce in the Rs13,700crore online retail industry.(Source: http://articles.economictimes.indiatimes.com/2014-07-09/news/51248192_1_myntra-ashutosh-lawania-ganesh-subramanian)
Foreign players are not allowed to operate multi-brand retail stores. Some retail players like French retailer Carrefour on Monday announced its exit from India, months after the ruling BJP made it clear that it was opposed to allowing foreign players to operate multi-brand retail stores. On May 3, TOI had first reported that the world’s second largest retailer had started work on an exit plan after talks to sell its stores to Sunil Mittal’s Bharti group failed and the French company saw little hope of the government allowing foreign chains to set up multi-brand outlets in India. With BJP unrelenting on allowing foreign chains to set up shop, global giants such as Wal-Mart have parted ways with Bharti to focus only on wholesale cash-and-carry and sell to kirana stores, restaurants and canteens. Tesco, which has partnered with the Tata Group, is the sole retailer that has gone to the extent of receiving government permission to set up multi-brand stores in India
But still India remains attractive to global fashion and lifestyle brands, according to a research by management consulting firm Third Eyesight. Last but not the least, it is just that at the operational level most brands should take a cautious approach to retail growth focusing on operational efficiency and tapping second-tier markets and channels such as e-commerce to sustain their business.