Govt allows Chinese smartphone maker Oppo to open stores

The government has approved the foreign direct investment (FDI) applications of Chinese smartphone manufacturer Oppo and lingerie retailer Zivame, gifting brand Chumbak and two other firms.

On Tuesday, the Foreign Investment Facilitation Portal (FIFP) approved single-brand retail trading for Oppo for an unspecified amount.

The company had been one of the first to apply under the liberalised FDI norms, first updated by the government back in June 2016. While the company had applied soon after, the government had taken a long time to finally give the nod owing to initial reservations about allowing a major Chinese retailer rights to sell in India, a senior government official hinted.

The latest move allows Oppo to sell its products both online and offline, apart from the existing wholesale retail route used by it. Currently, the company sells its products through franchises using the distributor model.

As of June quarter, Oppo is the fourth largest player with 8 per cent share in the Indian smartphone market, according to market intelligence firm International Data Corporation.

On the investment front, current norms allow an entity to invest through the automatic route up to 49 per cent, while allowing for full investment post-government approval.

However, in cases where FDI exceeds 51 per cent, sourcing of around 30 per cent of the value of goods purchased will have to mandatorily be done from India. This will have to be preferably from micro, small and medium enterprises (MSMEs).