Oak Lawn Marketing, a subsidiary of Japanese telecom company NTT DoCoMo, is set to enter India’s burgeoning virtual retailing space through a tie-up with TVC Skyshop, which operates in the same segment.
Virtual retailing refers to companies selling products through television or print (magazines and newspapers). India’s virtual retailing market is close to ₹2,000 crore and includes players such as TVC Skyshop, Indiatimes, Homeshop18, Shraddha Skyshop, Star CJ and the US-based GuthyRenker.
OLM, a $300-million media and branding company in which NTT DoCoMo has a 51 per cent stake, is close to ink the deal with TVC Skyshop in two weeks, after which Indian consumers can get access to “high quality” Japanese products, said people aware of the development. The company primarily focuses on home convenience, health and beauty consumable, fitness and wellness products.Equity infusion
Sources added there will be some major equity infusion by OLM in the coming months.
Interestingly, the deal is happening a time when NTT DoCoMo’s investment in India’s telecom space hangs in the balance.
The company, which holds a 26 per cent stake in Tata Teleservices, is expected to take a call by March on whether to stay invested or exit Indian venture, according to some reports.
TVC Skyshop Managing Director Vinod Agarwal did not respond to an email sent by Business Line .
TVC Skyshop, which has investments from private equity players such as Samara Capital and Morpheus, currently sells apparels, electronic items and other consumer durables under its own label.
After the tie-up, it will sell OLM’s two flagship products – Magic Mattress and Leg Magic.
For the Nagoya-based company, the tie-up will benefit from understanding the market and the consumer mindset. Besides, there are regulatory hurdles in terms of foreign direct investment, said Devangshu Dutta of marketing and consultancy firm Third Eyesight.Major challenge
“Payment through cards remains a major challenge for the online or virtual retailing industry.
Companies like OLM do not have expertise in managing cash on delivery and reverse logistics.
Hence, the tie-up will help the company avoid some painful and expensive learning curve that other companies have faced,” he added.