‘Changes to FDI Pol­icy Un­clear, Don’t Help the Cause of Star­tups’

But Len­skart isn’t af­fected by the pol­icy: Founder

The Economic Times - - Brands: Creating Desire - Ra­[email protected] times­group.com

New Delhi: Peyush Bansal, founder of eye­wear on­line mar­ket­place Len­skart, said the gov­ern­ment’s lat­est amend­ments to the for­eign di­rect in­vest­ment (FDI) in mar­ket­places are “un­clear” and are not help­ing the cause of many of the star­tups in the coun­try.

“They make poli­cies which make life for star­tups dif­fi­cult,” Bansal said. “It is be­com­ing more and more dif­fi­cult for en­trepreneurs like us to run busi­nesses.”

In a bid to tighten over­seas-funded mar­ket­places from in­di­rectly sell­ing prod­ucts to con­sumers through their plat­forms, In­dia last month an­nounced ma­jor changes to its FDI pol­icy on ecom­merce mar­ket­places in­clud­ing bar­ring such plat­form op­er­a­tors from sell­ing prod­ucts from their af­fil­i­ates and con­trol­ling the ex­tent of how much large ven­dors can sell on such plat­forms.

Bansal said his com­pany is not im­pacted by the De­cem­ber pol­icy as his com­pany is a man­u­fac­turer and Len­skart pro­duces its own eye­wear brands such as John Ja­cobs and Vin­cent Chase that con­sti­tute about 95% prod­ucts on the Len­skart mar­ket­place. In­dia al­lows com­pa­nies that man­u­fac­ture their prod­ucts in In­dia to sell through ecom­merce as well.

Farid­abad-based Len­skart has in­vest­ments from TPG Growth, Ron­nie Screw­vala-led Uni­lazer Ven­tures, IDG Ven­tures In­dia and Premji In­vest, among oth­ers. Last year, TR Cap­i­tal and Hong Kong-based hedge fund Stead­view Cap­i­tal had bought stakes in Len­skart in a sec­ondary deal. The com­pany sells multi-brand eye­wear prod­ucts from Ray-Ban, Oak­ley, Fcuk, Tommy Hil­figer and a host of other global la­bels.

Also, the com­pany op­er­ates more than 450 Len­skart fran­chisee-run out­lets in around 100 cities na­tion­wide.

Bansal said his com­pany thought of tak­ing ad­van­tage of the uni­fied li­cence in sin­gle-brand re­tail­ing that al­lows for­eign-funded com­pa­nies that sell prod­ucts un­der one la­bel to mar­ket their wares through both off­line and on­line chan­nels. But his ad­vis­ers dis­cour­aged him to do so, ar­gu­ing that the gov­ern­ment might clas­sify its ap­pli­ca­tions as a multi-brand re­tail­ing case as Len­skart has mul­ti­ple brands un­der one com­pany.

“In In­dia laws are very funny. We sell our own brands and Len­skart has cre­ated Vin­cent Chase, John Ja­cobs, Aqua lens -- mul­ti­ple brands. “Be­cause of the gov­ern­ment’s nonclar­ity, even brands we have cre­ated are con­sid­ered multi-brand re­tail,” he said.

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