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Apple Plans 200 Franchisee Stores In India By 2015: Report

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It looks like Apple has finally started considering India as one of its important markets. The company is apparently planning to increase the number of exclusive franchisee stores in the country  from the existing 65 stores to 200 stores by 2015, according to a report from The Economic Times.

Franchisee Stores As Apple Stores?

Citing three such unnamed franchisees, the report also mentions that Hugues Asseman, Apple’s Vice President (Sales) for Europe, Middle-East, India, and Africa, has asked these franchisees to redesign these stores to match Apple’s own retail stores in terms of layouts and fit-outs, saying that and the company will reimburse the entire cost to the franchisee.

We believe this is particularly interesting considering that Apple has not opened any retail store of its own in the country. While reports had previously suggested that Apple was planning to launch an Apple Store in India last year after the Indian Government had allowed 100% FDI (Foreign Direct Investment) in single brand retail stores, Apple CEO had later dismissed this as a rumor and the company has no such plans in India yet. Even if the company plans to open a retail store in India in the future, it would have to adhere to the 30% local sourcing clause in the regulations, which mandates companies to source at least 30% of the goods to be sold from local partners.

With the company not producing any of its products in India, this could turn out to be a major roadblock for Apple to open a retail store in the country, which we believe is why the company is probably working around FDI regulations to provide the same Apple store retail experience to users without opening any physical store of its own.

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Some of the exclusive franchisee stores, also called as Apple Premium Resellers, in India include Reliance Digital’s iStore, Ample Technologies’s Imagine Store, Consolidated Premium Retailers’s iPlanet and Maple Digital Technology International among others.

iPhone Sales in India

Citing an Apple premium reseller, the report also mentioned that several premium resellers were generating iPhone sales worth Rs 2 crore every month, up from Rs 30-40 lakh per month earlier. It also mentioned that Apple has sold more iPhones in India since November when it changed its retail strategy than the company did in the last four years.

Note that while the company doesn’t offer any country specific iPhone sales data, Apple had said that it had generated a total $30.66 billion revenue (pdf) from 47.8 million iPhone sales globally for the quarter ending December 31, 2012. This was a significant 28% growth from $23.95 billion revenue generated from 37.04 million iPhone sales in the same quarter last year (Q1-FY12).

This development also ties in with the IDC report from earlier this month, which had suggested that Apple had generated the second highest revenue in the Indian smartphone market for Q4 2012, although the report hadn’t revealed any specific numbers around this.

Increasing Apple’s presence in Multi-brand stores

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Apart from this, Apple also apparently plans to expand its presence in multi-brand stores in the country like Croma and The Mobile Store. Remember that Apple has tie-ups with national distributors like Redington India to distribute Apple products like iPads, Macbooks and iPods. It had also inked a deal with Redington India and Ingram Micro last year to distribute iPhone through their respective channel partners in India.

Following these tie-ups, we had noticed that Apple had become significantly aggressive with both marketing and the pricing of iPhone in the country, including offering Apple products on an EMI basis, which was typically not available earlier in the country.

Related:

Apple Finally Extends iTunes Store To India
Apple Introduces Rupee Pricing In App Store; How Does It Impact You?
Apple Q1-FY13: 47.8M iPhones, 22.9M iPads Sold; And $54.5 Bn Revenue
Apple Q1-FY13 Concall: 0.8M iOS Apps, 250M iCloud Accounts, $2.1Bn iTunes Revenue & More

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