Zivame is a Bengaluru based online lingerie retailer, which has been growing across the nation over the past two years. The startup has applied for a license to function as a single brand retailer. This is in lieu of a Government policy that came into existence in 2015, which allows companies that are backed by foreign investments to sell their private labels and to build eCommerce channels to successfully sell their products. The parent company of Zivame, that is, Actoserba Active Wholesale has applied to the Department of Industrial Policy and Promotion in order to expand the existing operations and to convert to retail from wholesale. In the case of a single brand retail, the entity is allowed to set up stores and sell products under a single brand name only. With the single brand retail license, Zivame will be able to carry out its expansion plans and reach across customers in Tier 2 and Tier 3 cities.
Zivame has raised about $50 mn from investors and has also announced its strategy of launching a 100 offline stores across the Country to ensure that the customers have a satisfying shopping experience. Currently, foreign direct investment upto 49% is permitted across India. Beyond that, it is important to seek the Government permission. Under the regulatory framework, in order to facilitate foreign investment, it is essential for the company’s products to fall under a single brand and to be sold under a single brand across the globe. The Govrnment is mulling over the allowance of a 100% FDI in order to capture the bigger players in the industry.
Benetton, an Italian fashion brand, had earlier applied for a single brand retail license. Currently, it operates under a wholesale business in India and supplies products which are sold through a network of franchises. Earlier, Urban Ladder had also filed for a single retail license in order to change the business structure and to sell its products online and offline, without having to compromise on the foreign direct investment.