India has given Chinese smartphone maker Oppo the go-ahead to open its own single-brand retail stores, boding well for rivals like Apple Inc which are seeking similar approvals.
Oppo has become the first pure play smartphone brand to win such a clearance in the world’s No. 3 smartphone market, where Apple has been vying for a bigger market share.
Although India allows foreign firms to sell directly to consumers through a ‘single-brand retail’ route, companies must source 30 percent of the products locally.
The country moved to partially relax those conditions in 2016, exempting foreign retailers from the sourcing rule for three years in a bid to attract more investment.
The Oppo decision is positive for companies like Xiaomi and Vivo, which have been trying to get similar approvals, Tarun Pathak, an analyst at Counterpoint Research, said.
And it might mean approval in the near future for Apple, whose sales in India are mainly driven by its older generation iPhones, Pathak said.
“Opening a retail store will boost Apple’s newer generation sales...it’s also the experience that having a store allows you to offer to consumers,” Pathak said.
Apple applied for store licenses last year, shortly after its Chief Executive Tim Cook made his first visit to India, where it has only about three percent market share.
LVMH wins clearance
India approved Oppo Mobiles India Pvt Ltd’s request on Tuesday, a notice on the Department of Industrial Policy & Promotion’s foreign investment facilitation portal said.
Oppo is one of four phone brands, alongside Vivo, OnePlus and Imoo, owned by the Chinese firm BBK Electronics.
It plans to start making phones at a plant near the capital New Delhi by the end of 2017, with exports planned in the next two to three years, Indian daily Business Standard reported.
Oppo partners with Taiwan’s Foxconn Technology, which also makes iPhones, on assembling phones in India, where Apple too has begun assembling some of its lower-end iPhones.
The government also said it had approved luxury goods retailer Louis Vuitton’s application to open its own stores after previously giving the go-ahead to Amazon.com and hardware and electronics maker Acer India.