Apple and the government of India haven't been able to find common ground in the matter of allowing the iPhone-maker to setup its single-brand stores in India. There have been reports about Apple setting up its iconic Apple Stores in different locations across India since 2016, but there hasn't been any major development since. But that changes now.
Apple's first flagship retail store in India is expected to be inaugurated by 2021, Tim Cook confirmed in the 2020 Apple Annual Shareholders meeting. Cook also said that the online store is set to go live by the end of this year. This is a huge win for Apple, which has been negotiating terms of expanding its direct presence in India for quite some time.
India's first Apple Store
Apple has reportedly leased around 25,000 square feet in Maker Maxity mall in Mumbai's Bandra Kurla Complex (BKC) for its flagship store. The three-storeyed Apple Store will draw similarities to the company's stores in Hong Kong, which are kind of landmark destinations.
Each of the three floors at the upcoming Apple Store in India will serve a different purpose. In addition to being a retail store, there will also be an experience and service centre to meet all consumer demands.
Apple got the government's approval on its first company-owned and operated store in Mumbai in October last year. The delay in setting up its single-brand store in India is largely due to the government of India insisting Apple to get into retail with a partnership.
To set up its own shop, any foreign company with more than 51 per cent foreign direct investment (FDI) had to locally produce at least 30 per cent of its products sold in India. But a new reform passed in August last year allowed single-brand license holders, like Apple, to include exports and contract manufacturing in the 30 per cent sourcing.
With the first wholly-owned-and-operated Apple Store coming to India next year, we can expect more such stores to follow. Apple could expand its direct retail presence to other major cities like New Delhi and Bengaluru.
Apple's franchise-run stores in India
The company currently operates 481 retail stores in 18 countries, including China. These stores offer a uniform experience to consumers and have built a reputation to convince buyers to make the purchase. But in India, Apple had been allowed to have a retail presence only through a franchisee model.
The first Apple Store in India will be bigger than the biggest franchisee-run Apple Premium Reseller store in High Street Phoenix, which is spread across 8,000 square feet.
But it has become important for Apple to move up from a franchisee model and directly serve its customers in India after iPhone sales in the country helped Apple dominate the premium smartphone segment. Apple holds a majority in the premium segment, and it is largely credited to the success of models like iPhone 11 and iPhone XR. The premium segment accounts for 2.7 per cent of the Indian smartphone market and Apple controls 2 per cent of its total share, which is a remarkable feat.