French sports goods company Decathlon queues up for online foray in India

NEW DELHI: In the first move of its kind by a foreign retailer, French single-brand sports goods company Decathlon has sought the government's nod to sell products online from its store even as India is debating whether to allow overseas investment in e-commerce.

The retailer, which secured approval for a wholly-owned, single-brand retail venture last February, has written to the Department of Industrial Policy and Promotion (DIPP) to allow it "captive e-retail trading" as well. "The company has written... It's being examined," said a government official aware of the deliberations. Prajval Ray, head of e-commerce for Decathlon India, did not respond to an e-mailed questionnaire or text messages and phone calls.

The proposal, in form of a representation, seeks an amendment in the single-brand approval given to the company and emphasized that the online selling would be a "marginal extension" to the retail route.

The company has proposed online sales from its stores to provide access to customers in far-flung areas. The company currently operates 11 stores and is slated to open its 12th in Noida in June. The sporting goods giant operates more than 500 stores in about two dozen countries.
The company already has a wholesale, cash-and-carry arm that allows member resellers to source goods online from it to facilitate trade in areas where having a standalone store isn't feasible. Also, Decathlon sells its products online to consumers through resellers including Snapdeal.com and sports365.in among others.

Decathlon, which sells everything from running shoes to mountaineering equipment, has argued that the move would have minimal displacement effect and give a significant boost to local business.

India had in January 2012 raised the foreign direct investment (FDI) limit in single-brand retailing to 100% and subsequently eased many of the stiff riders attached, including local sourcing of products, to make the policy more conducive to investments.

The government has already initiated discussions on allowing foreign direct investment in the e-commerce space. DIPP on January 7 floated a discussion paper inviting comments from all stakeholders on caps and conditions for FDI in the segment. The existing policy does not allow FDI in business-to-consumer or B2C e-commerce, while100% FDI is allowed in business-to-business or the B2B category.

The norms for single-brand retail clearly state that trading in any form by means of e-commerce would not be permissible under the rules for this.

Experts argue that policy should be more flexible, keeping in view the trade's ground realities.

"There should exist enough flexibility to such stores to cater to their customers using various platforms including Internet, centralised call centres, catalogues, memberships," said Akash Gupt, executive director, PwC.

An official with another big four consultancy firm said the policy does not prevent retailers from using value payable post services or to take orders on the phone from customers in far-flung areas, so why should it not be allowed using modern technology.