Chinese smartphone maker Oppo has received the Foreign Investment Promotion Board’s (FIPB) approval to set up single-brand retail stores in India, reports Reuters. This will allow Oppo to sell directly to customers and to scale its wholesale business.
Currently, foreign direct investment (FDI) beyond 49% requires government approval. Previously, when companies received permission to increase FDI beyond 49%, the condition under which the approval was given was that the company would have to source 30% of the goods purchased from India. This norm was later relaxed in case of what the government calls “state-of-the-art technology firms”, who were exempted from it for up to three years.
In March this year, Oppo invested Rs 145 crore in setting up a manufacturing unit in the Greater Noida area, where it is expected to start manufacturing phones by the end of this year. The company had said that it will begin manufacturing by December 2017, and that the unit will be fully operational in 3 years, by March 2020. Back in November 2015 Oppo had started contract manufacturing in India in partnership with Foxconn. It had begun with manufacturing the Neo 7 smartphone in the country, which passes through its own quality tests.
Apple’s retail plans in India
Last year, Apple’s CEO Tim Cook had said that “India is now one of our fastest growing markets…We’re looking forward to opening retail stores in India down the road.” And during his visit to India in May 2016, he had announced that Apple is planning to set up three branded retail stores in India, but wanted the government to drop the 30% local sourcing clause. The government hadn’t agreed to Apple’s request at that point in time. Apple even tried to gain the “state of the art” status, but it is not clear if the Indian government has accepted it or not.
Since then, while Apple hasn’t yet opened its own retail store, it has steadily increased its focus on India. It has retail distribution tie-ups with HCL Infosystems, Beetel Teletech, Rashi Peripheral, Redington and Ingram Micro. In June this year, Apple also confirmed that it is manufacturing iPhone SE models domestically through a tie-up with Wistron, a Taiwan-based Orginal Equipment Manufacturer (OEM) with a manufacturing plant in Peenya, Bangalore.