APPLE

Apple to triple exclusive stores in India

KOLKATA/NEW DELHI: Buoyed by the success of the iphone in India, Apple has decided to scale up its presence in the country and plans to triple its exclusive stores to around 200 by 2015, said three of its dedicated franchisees. 

These franchisees, who did not wish to be named, told ET that they have been asked to scale up operations in the country as the Cupertino-based company plans to grow aggressively in the country. In addition to increasing the number of Apple exclusive stores, called apple premium resellers, that are owned and managed by 17 franchisees, the company also plans to expand its presence in multi-brand stores, they said. 

Some of these plans are said to have been discussed during last month's Mumbai visit of Hugeues Asseman, Apple's vice president (sales) for Europe, Middle-East, India, and Africa. Asseman met key trade partners and franchisee owners to take stock of the company's India business and to outline the company's expansion plans. Apple's London-based spokesman, Alan Hely, declined comment on the company's expansion plans. 

India had for a long time been a low-priority market for the company founded by Steve Jobs. But surging sales of iPhones and iPads here, combined with the growing inroads of Samsung in its traditional US market and elsewhere, have prompted Apple to take a serious look at India as it searches for new growth markets. 

The company has launched a massive advertisement campaign in the country and started offering iPhones on equated monthly installment (EMI) scheme, pitting itself head-to-head against its Korean rival. It has also recently extended the EMI scheme to iPads. "After the success of iPhone, Apple has finally realised that India is a big market and needs separate focus," said a Mumbai-based Apple franchisee, on condition of anonymity. 

At present, there are more than 65 exclusive Apple stores in India owned and managed by franchisees. Apple products are also sold through multi-brand outlets such as Croma and The Mobile Store. 

So far, Apple has not opened any of its iconic company-owned stores in India. While the government has allowed single-brand companies like Apple to operate fully-owned stores, it has made it compulsory for such firms to source 30% of the goods they sell here from local vendors. Currently, the US company does not manufacture any of its products in India and the 30% sourcing clause could, therefore, deter it from opening self-owned stores. However, it has asked its franchisees to upgrade Apple exclusive stores in India to global specifications, including designing, lay-outs, fit-outs, and is even sending its global suppliers to fit those stores. These outlets will have a lot of glass decor, which Apple uses at its company-owned stores in the US. The cost of refitting and redesigning each store is expected to be more than Rs 1 crore, which the company will reimburse the franchisee owners over a year, an Apple Premium Reseller franchisee said. 

Reliance Retail, Apple's largest premium reseller in India, is already planning to expand the number of Apple iStores from 20 at present. "After consolidating our operations, we are currently looking at several properties for Apple stores. The existing stores and newer ones will be remodeled with newer fixtures that Apple uses in some of its best stores internationally to provide a far superior consumer experience," Brian Bade, CEO at Reliance Digital, said. 

Bade, however, said Reliance Retail has no specific target for the number of Apple stores it wants to open. "The Apple business is extremely good and showing healthy growth," he said, adding Reliance Retail is looking at prime properties in the range of 800 sq ft to 2,000 sq ft for the Apple stores. "Apple has expansion plans in India, but it is not possible for me to comment on them," he added. 

Some sections of the trade feel that Apple's expansion plans may be a little ambitious. "Expanding the retail network to so many stores as it may be planning may be a little stretched for a market like India, but Apple surely knows its business best," says Himanshu Chakrawarti, CEO at The Mobile Store, India's largest mobile phone retailer with 1,000 stores where iPhone is the second-highest revenue grosser after Samsung Galaxy Grand.