NEW DELHI: Premium handset maker
said it will avoid making any strategic investments based on short-term opportunities offered by the government’s move to relax
rule for foreign single-brand retailers, since it is wary that the rules may change again. Other brands like Oppo and
, however, said the move will accelerate growth by stimulating investments and create more employment opportunities.
“Given that regulations are still evolving and may change further soon, we will continue to make strategic investments based on our long-term driven investment philosophy and not react to short term opportunities,” Vikas Agarwal, general manager at OnePlus India, said in a statement.
He though said the new regulations will allow OnePlus to further explore new possibilities. “Official online stores are a great way to deliver an enhanced user experience, to engage regularly with our community and are an efficient way for nurturing direct relationship and brand loyalty with customers.”
Agarwal added that the government’s move will the company expedite its export plans.
The government on Wednesday eased foreign direct investment (FDI) rules around Single Brand Retail Trade (SBRT) by allowing exports and contract manufacturing to be counted in the mandatory 30% local sourcing norm over a period of five years. The government also allowed foreign single brand companies to sell directly via webstores, irrespective of a brick-and-mortar store presence.
Analysts added that existing brands will be able to a wider variety of products besides offering holistic experience to consumers.
Navkendar Singh, associate research director at International Data Corp (IDC), said the latest move is aimed at positioning India as a favourable destination for foreign brands, that they can make in India, sell in India and export as well. “With easing the norms, India is aiming to emerge as a destination for these brands amidst the ongoing trade wars, which is a strong statement.”
Hanish Bhatia, senior analyst at Counterpoint, added that the move has come at the right time as these electronic manufacturing services (EMS) firms are already hunting for new manufacturing locations to diversify their presence due to ongoing US-China trade feud.
IDC’s Singh said Oppo, Vivo, Huawei have big self-owned big stores in China and they can replicate.
“This [change in norms] will accelerate growth, by stimulating investments and create more employment opportunities. Consumers will stand to benefit with access to a wider variety of products, at both online and offline platforms,” Sumit Walia, VP-product and marketing at Oppo India, said in a statement to ET.
Nipun Marya, director-brand strategy at Vivo India, said the decision will promote more foreign investments in the Indian manufacturing sector, and will create many jobs in India, in the long run. “With the easing of restrictions on SBRT, we look forward to giving our consumers top of the line retail experiences.”