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INDIA BUSINESS WORLD - 16th April To 30th April - 2009
NOKIA TIES UP WITH HCL ARM FOR DIRECT SALES
NOKIA has entered into a joint venture with HCL Infocomm to set up exclusive retail outlets that sell handsets and services directly to consumers in India, taking advantage of a provision that allows foreign firms to own majority stakes in such ventures.
The world’s largest mobile handset maker will hold a 51% stake in the venture with HCL Infocomm, a 100% subsidiary of HCL Infosystems. This is the first single-brand retail joint venture in the mobile handset space in India.
The venture will set up flagship Nokia handset stores and virtual Nokia Music stores. It will also sell Nokia’s luxury Vertu handsets and consumer services under the Ovi brand.
Currently, Nokia products are sold in India through individual franchisees, but the company has now decided to take advantage of the FDI guidelines introduced in 2006 that allow foreign companies to invest up to 51% in single-brand retail ventures.
Nokia will import new handsets, particularly those not manufactured in India, along with Nokia branded accessories such as bluetooth headsets, car chargers, chargers, ear phones, headphones and memory cards and sell them through the single-brand retail stores, the company said in its application to the foreign investment promotion board (FIPB), seeking approval for the venture. The FIPB is the government body that clears all major foreign investment proposals in India.
The proposed venture will sell products and services under three brands — Nokia, Vertu and Ovi. An industry source familiar with the development said this will not flout the ‘single brand’ guideline as Indian regulations allow a retail company with a foreign partner to sell more than one foreign brand, provided they are manufactured by the same company.
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