Now, China’s LeEco Joins Queue for Sin­gle Brand Re­tail Li­cence

Co third af­ter Ap­ple and Xiaomi seek­ing nod for own stores, to set up dis­tri­bu­tion net­work in two months

The Economic Times - - Business Of Brands - Gul­veen.Au­lakh@ times­group.com

New Delhi: Chi­nese con­tent-to-smart­phones player LeEco has ap­plied for a sin­gle-brand re­tail li­cence and sought re­lax­ation from the com­pul­sory 30% do­mes­tic sourc­ing rule so that it can bring in “cut­ting edge tech­nol­ogy” that can­not be pro­cured lo­cally.

LeEco is the third for­eign com­pany af­ter Ap­ple and Xiaomi to take the sin­gle-brand re­tail route in In­dia, which will en­able it to open its own stores. The com­pany is ex­tend­ing its ag­gres­sive push in a mar­ket that it en­tered only in Jan­uary with two smart­phones and has since launched a mar­ket­ing blitz, an­nounced a $10 mil­lion in­vest­ment to set up a con­tent de­liv­ery net­work as well as plans to pro­duce de­vices lo­cally.

“We have de­cided to go for our own stores, so we have ap­plied to the FIPB (For­eign In­vest­ment Pro­mo­tion Board),” Atul Jain, chief op­er­at­ing of­fi­cer at Le Eco In­dia, told ET, adding that the ap­pli­ca­tion was filed ear­lier this week. He said the com­pany will set up its dis­tri­bu­tion net­work over the next two months.

It in­tends to roll out its fully owned exclusive re­tail stores in eight-10 cities start­ing with New Delhi, Mum­bai and Ben­galuru, hous­ing prod­ucts in­clud­ing phones, TVs, VR head­sets, Blue­tooth de­vices and power banks. The com­pany will also add 500 fran­chise stores, which along with the exclusive stores, will en­tail an in­vest­ment of about .₹ 50 crore, Jain said.

The Bei­jing-head­quar­tered com­pany, which has been the quick­est to seek ap­proval for in­vest­ing in In­dia – within three months of launch­ing oper­a­tions – plans to be­gin mak­ing smart­phones lo­cally within the next six months. It also in­tends to launch tele­vi­sion screens, above 40-inches, by June-end at “dis­rup­tive prices,” Jain added.

LeEco’s lo­cal man­u­fac­tur­ing and re­tail stores com­bined will em­ploy about 500 peo­ple, while its R&D cen­tre in Ben­galuru will em­ploy around 1,000 peo­ple.

In­dia is in­creas­ingly be­com­ing a crit­i­cal mar­ket for lead­ing smart­phone mak­ers and tech­nol­ogy com­pa­nies given a grow­ing young de­mo­graphic that has mas­sive ap­petite for high-tech prod­ucts and ris­ing pur­chas­ing power.

To give high-end sin­gle-brand en­ti­ties eas­ier

ac­cess to In­dia, the govern­ment de­cided last year that “in case of state-of-the-art and cut­tingedge tech­nol­ogy,” sourc­ing rules can be re­laxed sub­ject to govern­ment ap­proval. This was part of the mea­sures taken by the govern­ment to re­form the FDI pol­icy with the aim of boost­ing man­u­fac­tur­ing.

Separately, tele­com min­is­ter Ravi Shankar Prasad Thurs­day said at an in­dus­try event that the govern­ment would take more steps if re­quired to en­cour­age lo­cal pro­duc­tion. “We came with all the poli­cies like M-SIPS, dif­fer­en­tial duty struc­ture, ease of do­ing busi­ness...if fur­ther more is needed, we are quite open to come with new pol­icy guide­lines,” Prasad said. M-SIPS (mod­i­fied spe­cial in­cen­tive pack­age scheme) of­fer cap­i­tal sub­si­dies to large in­vest­ments in elec­tron­ics man­u­fac­tur­ing and sys­tem de­sign. LeEco, for­merly known as LeTV Hold­ings or Leshi In­ter­net In­for­ma­tion and Tech­nol­ogy, is repli­cat­ing its China model of set­ting up an ecosys­tem con­sist­ing of de­vices, con­tent, cloud and a user in­ter­face plat­form in In­dia.

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