IT product-makers keen to sell via own portals

With the Government giving them the green signal to sell directly online, foreign brands and companies with a manufacturing base in India are eager to set up their own e-commerce portals.

IT product manufacturers such as Lenovo, Dell and Panasonic are keen to float their own portals, and apparel majors are also contemplating such a move.

Currently, these firms sell online through third-parties such as Flipkart and Snapdeal, or market their wares on their company’s website, which is managed by an Indian partner.

The Government’s Budget initiative has given these firms an opportunity to launch their own portals.

“We are evaluating the recommendations in detail. But, right now, it’s too early to comment,” said a spokesperson at Dell, whose online sales (to the consumer and home division) are currently managed through its partner network, CompuIndia. The company claims to deliver products within 24 hours through its partner network.

‘Positive move’ Lenovo India Managing Director Amar Babu said the Government’s move to throw open the doors to foreign firms was very positive.

He added that online was proving to be one of the key routes to reach out to the market, and that it provided an opportunity for companies to engage directly with consumers.

“We can also showcase our entire product range, which cannot be done with partner sites. It will also boost the manufacturing sector. Currently, we manufacture commercial laptops but now can look at manufacturing consumer laptops too,” he said.

He added that the company was, not looking at competing with pure-play e-commerce companies. Lenovo sells through thedostore.in.

Manish Sharma, Managing Director, Panasonic (India), says his company is looking to launch an ‘e-store’ this month, given the growing popularity of online shopping. “We will appoint a re-seller who will maintain the portal and do the distribution on behalf of Panasonic,” he added.

Seeking policy clarity Meanwhile, ambiguity over what kind of manufacturing units have been allowed to sell online looms large. Kumar Rajagopalan, CEO of the Retailers Association of India, said the move would allow even carmakers to sell online.

It would also help manufacturers cut down on the large number of people and third-party players involved in the supply chain, he added.

However, analysts have pointed out that the move might not prove be a great incentive for foreign companies to set up manufacturing units in the country, as importing products from markets such as China, Taiwan and Bangladesh is 25 per cent cheaper.

‘Scale is key’ “The brands will have to see if there is scale. At present, apparel brands such as Diesel, Benetton and others are not allowed to sell directly, but through the franchise route, which means they can enter the market in a tie-up with a Reliance Retail, Arvind or Trent,” said Deepak Abott, Vice-President of PayTM, a mobile commerce player.

“There is no clarity as to how they will be able to set up units here. The Government has to provide huge sops and tax incentives so that these foreign firms can set up manufacturing set-ups here,” he added.

COMMENT NOW