Bigger bite: Apple to sell directly in India through online first

Apple will start selling iPhones directly to Indian consumers first through its own online store as the government on Wednesday allowed foreign single brand companies to sell directly via webstores, irrespective of a brick-and-mortar store presence, two senior industry executives said. The webstore is likely to come up over the next 3-5 months as it involves duplicating its global online store template for the Indian market, said the executives who are aware of Apple’s plans.The US firm has also decided to set up its iconic brick-and-mortar Apple Store in Mumbai over the next 12-18 months, as the government has also allowed exports and contract manufacturing to be counted in the mandatory 30% local sourcing norm over a period of five years.About 35-40% of iPhone sales in the country come from ecommerce and hence the company wants to latch onto this opportunity, one of the executives said. “Online is also a big sales driver for iPad tablets and MacBook laptops, and contributes over 25% of annual sales in India,” he said.At present, Apple has online sales partnerships with Amazon, Flipkart and Paytm Mall in the country where Apple authorised third-party sales of products.An email sent to Apple India did not elicit any response as of press time.Apple will now be able to meet the local sourcing norms easily since it has started assembling of iPhones in India through contract manufacturing and has plans to expand, one of the executives said. It has also recently started export of iPhones from India, which too will be expanded into more models and markets, the person said.However, setting up the physical Apple Store involves much longer time since these stores are destination outlets that stand out for their architecture and design which even make them tourist attractions, the other executive said. Apple at present runs company-owned Apple Stores in 25 countries where it also operates its web store.Swedish retailers IKEA and H&M said Wednesday’s easing of norms for 100% foreign direct investment (FDI) in single-brand retail will drive investment in India and enhance ease of doing business for single brand retailers. “We see this supporting the ease of doing business in India and driving in larger investments from global companies,” H&M India country manager Janne Einola said. The fashion brand has been sourcing from India for its international markets since the last 30 years, and hence it will now be easier for the company to now meet the 30% local sourcing norms, he said.An IKEA spokesperson said the furniture retailer too has been sourcing from India for more than 30 years. “We are committed to increase local sourcing from India.”EY partner (retail and consumer products) Pinakiranjan Mishra said it would be easy for global brands to set up webstores, as the country has logistics and systems for online delivery in place because of ecommerce expansion. “A new brand wanting to enter India need not wait for years just to open a store,” he said. “The relaxation of sourcing norms will help the existing single brand players in meeting the norms which would have been difficult earlier.”

from Economic Times https://ift.tt/2PlvweV