Chinese internet company and handset-maker LeEco has filed an application with the Foreign Investment Promotion Board (FIPB) for opening exclusive stores in the country to sell its electronic products both through brick and mortar stores and a e-commerce portal.
Promising to bring “cutting edge technology” and “state-of-the-art” features to Indian consumers, it has also sought relaxation from the 30 percent domestic sourcing rule.
The domestic sourcing rule makes it mandatory for a foreign company operating under a single-brand retail banner to source 30 percent of its total sales from the country within a period of five years of kickstarting operations.
Most companies have asked the government to tweak the rule to allow them more time to show the 30 percent. The sector wants the sourcing clause to kick in five years after a company sets up its first store. It is learnt the government is considering relaxing the rulebook in a bid to implement “ease of doing business”
In the application, the company has said that it will open the stores, where it will display its complete range of products including TVs, VR headsets, Bluetooth devices and power banks, in the top eight to ten cities starting with New Delhi, Mumbai and Bengaluru.
“India is a key market for LeEco and we plan to significantly invest in setting up our business model in the country. We are committed to offering our users cutting edge technology at disruptive prices. We have received a great response from consumers so far for our Superphones and now plan to strengthen our presence in the market by opening our own stores and e-commerce portal to offer our users the best-in-class experience”, Atul Jain, chief operating officer, smart electronics business, LeEco India said adding that the company will also open 500 franchise stores across the country.
“We at LeEco are also aligned with the government’s Make-in-India initiative and also plan to start manufacturing in India very soon”, he added. Recently, company representatives met Union IT minister Ravi Shankar Prasad to discuss manufacturing initiatives.
Earlier this month, the company had also announced setting up in-house Content Delivery Networks (CDNs) in ten cities across India by end of 2016 for which it plans to invest over $10 million. Also, LeEco had shared its plans to set-up its research and development (R&D) centre in Bangaluru with an employment capacity of 1,000 staff by the end of the year.