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"Picture source: ThinkStockGerman sports goods makers Puma and Adidas have sought the government’s permission to operate their own ecommerce portals, the first among foreign companies to take advantage of the change in law that allowed single-brand overseas retailers to sell online as well in India.The two firms have also sought clarification and approval from the government on whether their existing wholesale entities can engage in direct retailing and ecommerce, executives said.“Based on the new regulation on single-brand retail, we have sought approval for Puma Sports India to do retail and e-commerce. The same entity was originally allowed to do wholesale of Puma products,” said Abhishek Ganguly, managing director of Puma India.The company had on March 3 filed an application with the Department of Industrial Policy &amp; Promotion (DIPP), the nodal agency for foreign direct investment in India. Adidas has sought a similar approval from the DIPP, a person familiar with the matter said. According to the DIPP website, Adidas also applied to the department on March 3.The company did not respond to ET’s emailed queries till press time on Sunday. Even as India allowed single-brand retailers to set up their own stores, such companies also maintained wholesale subsidiaries to supply to their chain of franchisees.That made things cumbersome as such companies had to set up separate entities for retail and wholesale, with different warehousing, inventory and accounting.In November 2015, the government had relaxed the rules for FDI in retail, permitting manufacturers to sell their products through wholesale, retail and ecommerce channel as well for the first time. “It has been decided that a manufacturer will be permitted to sell its product through wholesale and/or retail, including through e-commerce without government approval,” the DIPP said at the time.The DIPP further said in its announcement, “FDI policy on the SBRT (single-brand retail trading) provides that retail trading, in any form, by means of e-commerce, would not be permissible. It has been decided that an entity which has been granted permission to undertake SBRT will be permitted to undertake ecommerce activities.” According to retailers, the policy change will help streamline business operations.“The government’s new FDI policy on single brand makes things easier and simpler for a foreign entity to invest in retail.It will bring efficiency in supply chain, inventory, sourcing and generating employment in retail,” Ganguly of Puma said. “It’s a very progressive approach from the government. Once our approval comes through, it will make business much smoother for us.”Adidas had in November 2015 announced its intent to open its first fully-owned outlet in India in the second half of the fiscal, after it got clearance to invest in local retail operations. Follow and connect with us on Twitter, Facebook, Linkedin"
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