Apple Cracks Down on Indian Retailers to Upscale Stores
There was mixed news out of India today concerning Apple. The first news items is that India's Reliance Retail will shut 16 of its 20 exclusive Apple iStores as several of them aren't in compliance with the global store design specified by Apple which could disrupt the US Company's bid to push sales in India where its share of the smartphone market lags way behind leader Samsung. Reliance Retail, part of Mukesh Ambani-led Reliance Industries, used to run the largest chain of Apple Premium Reseller stores in India, offering the complete range of Macs, iPads, iPhones and iPods along with software and accessories.
According to the Times of India, Reliance Retail will keep just four iStores open -- one each in Mumbai, Pune, Bangalore and Kolkata. According to three senior industry executives aware of the plans of Reliance Retail and Apple, the Cupertino, California-based company has been unhappy with the pace at which Reliance had expanded Apple stores in the last four years.
The issue was that Apple's new retail store norms included a standardised design with higher ceilings, more white LED lighting, wooden floors, new display tables and a particular size. "Complying with such specifications in a market like India may not always make business sense since Apple is still a niche brand and in the current economic environment it becomes an added expense to change store design," said a senior executive who runs a chain of Apple stores.
The second story in the report is a little more upbeat. The Times of India report states that Apple wants to rapidly scale up its retail presence in India which will translate into setting up more than 200 exclusive stores in the next two years, besides entering tier II markets. Whether that means Apple Stores run by Apple or stores owned by Indian retailers is unknown at this time.
Yet no matter how you slice it, Apple is determined to attack the Indian market and reset the retail store quality bar much higher than is the norm in India in an effort to appeal to the higher end of the market. A little short term pain for long term gain is Apple's approach and one that will benefit Indian consumers manifold.