NEW DELHI: Apple, the maker of iPhones, has told government officials that it plans to invest close to Rs 1,000 crore in setting up its online selling platform, and opening three of its iconic retail stores across major cities over the next two to three years.“There have been meetings with company executives. The first store is likely to come up in Mumbai followed by Delhi and a third location is yet undecided,” a senior government official familiar with the company’s plans told ET.Apple did not respond to ET’s query on its investment plans.In a statement on Thursday, the company welcomed the government’s move and said that it is working on plans to set up its first company-owned retail store, besides setting up its own online store.“…we look forward to one day welcoming customers to India’s first Apple retail store. It will take us some time to get our plans underway and we’ll have more to announce at a future date,” Apple said. “We love our customers in India and we’re eager to serve them online and in-store with the same experience and care that Apple customers around the world enjoy,” the company added. 70902253 ‘Major Branding Exercise’The government on Wednesday eased foreign direct investment (FDI) rules around Single-Brand Retail Trade (SBRT) by allowing exports and contract manufacturing to be counted in the mandatory 30% local sourcing norm over a period of five years. The government also allowed foreign single brand companies to sell directly via webstores, irrespective of a brick-and-mortar store presence.“The export focus in SBRT is a winwin for all concerned. Apple has ramped up exports within a short period of two years from India. Apple’s exports in future will not just meet but far exceed the 30% local sourcing requirements multiple times…,” said Pankaj Mohindroo, chairman of the Indian Cellular and Electronics Association (ICEA) which has Apple and its contract manufacturers Wistron and Foxconn as members in India.ET reported in its August 29 edition that Apple plans to sell directly to Indian consumers first through its own online store – which is easy to execute given its existing global template – while working on opening retail stores, which will involve time and larger investments.People familiar with the matter said that the Apple stores will be a major branding exercise and the company hopes that customer experience within the store will help push sales through its retail and online partners, rather than take business away from them.“These stores are like mini-malls in themselves, where people walk and get an experience of the Apple world, typically spend about half an hour to 45 minutes, then go back to the small retailers or online channels through which they can get some discounts since Apple never really discounts products,” one person said.Vivan Sharan, technology analyst and partner at Koan Advisory, said that unlike some retailers whose investment goes into real estate, Apple does not invest in land.“So, most of its investments will go into operations, stores, logistics, architecture, back offices, call centers, web design, leading to the highest quality of job creation seen in the Indian retail sector yet,” said Sharan.Apple’s India journey though has been bumpy so far, with its market share currently hanging around 1% by volume and 3% by value, due mainly to a lack of demand for its expensive phones in a price-sensitive market flooded with affordable high-spec devices of Chinese players such as Xiaomi and OnePlus. The government has previously rejected proposals to permit reselling of refurbished phones, which would have helped Apple lower price of its devices, and also didn’t agree to sops tailored only for the Cupertino-based company. Later, the company’s application to open company-owned stores under a special category, which could bypass the mandatory local sourcing clause, kept languishing with the government for over three years.But the latest government move will help the company deepen its retail presence, which experts say could help push sales, backed up by its steadily expanding local manufacturing operations. In fact, Apple has already started exporting from India to Europe, which helps it conform to the new local sourcing rules needed to set up its flagship retail stores.“There is talk of many smartphone makers now setting up stores in India but nobody can match an Apple store’s premium,” said Navkender Singh, research director with IDC. “These stores will give Apple complete control over the experience of their customers and take ownership of a customer’s journey”.
from Economic Times https://ift.tt/346ZYwt
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