As per the latest changes in the e-commerce policy by FDI, some stars including Alia Bhatt, Deepika Padukone, Hrithik Roshan, and Saif Ali Khan could feel the blow on their own fashion brands. Because most of these brands are sold on websites like Jabong, Myntra and Flipkart and these companies own stakes in these celebrity brands.
“An entity having equity participation by e-commerce marketplace entity or its group companies, or having control on its inventory by e-commerce marketplace entity or its group companies, will not be permitted to sell its products on the platform run by such marketplace entity,” says the policy announced in December.
Now, this puts the stars in jeopardy and it remains uncertain as to how Alia Bhatt For Jabong, All About You by Deepika Padukone, House of Pataudi by Saif and HRX by Hrithik continue to sell on these websites.
Although both the e-commerce websites involved and the celebrities have maintained a mum over the issue, market analysts say that unless the websites sell back their respective stakes in the brands, the brands cannot sell their products on the e-commerce platforms from 1st of February when the policy comes into implementation.
“An e-commerce platform that has foreign capital, it is absolutely clear that you cannot hold inventory and have a stake in an inventory model,” said Devangshu Dutta, chief executive of retail consultant Third Eyesight. “It seems difficult (for the celebrity brands) with foreign capital and with the new clauses,” Dutta said. “They will have to spin it into a different company or something like that.”
According to company insiders, Myntra has controlling equity in HRX, co-owns House of Pataudi with Saif and holds a stake in Padukone’s label. Similarly, Jabong owns a stake in Bhatt’s brand, sources said.
Some of the celebrity brands that remain unaffected are Salman Khan’s Being Human, Virat Kohli’s One8 and Sonam Kapoor’s Rheson because they don’t have equity relationships with the e-commerce marketplaces.