Apple plans for changing its pricing strategy in India
By giving heavy Discount on Apple products soon it will be disappear from E-commerce poetals as the maker of iPhones and iPads reworks its pricing strategy in the fast growing India market ahead of launching its digitaland brick and mortar stores.
The company, awaiting clearance for its investment proposal to open Apple Stores in India, decided to clamp down on online discounting to bring pricing parity across offline and online trade, two senior industry executives with knowledge of the matter said, speaking on the condition of anonymity.
“As Apple expects its FDI (foreign direct investment) application will receive approval shortly, it wants to bring back pricing hygiene across online and offline so that it can draw customers to its own stores and make them a viable revenue generator,” one of the executives said.
Apple didn’t respond to an e-mail seeking comment until press time on Tuesday.
Chief executive Tim Cook talked about opening company-owned stores and the exciting opportunities India offers during a recent town hall meeting and in an interview to Fortune magazine. The company, which didn’t see India as a major market until a few years ago, is now placing long-term bets on the country.
On a call with analysts last month, Cook cited a young population, an expanding and increasingly affluent middle class with a thirst for best consumer products, robust economic growth and the government’s support and push towards economic reforms as the factors supporting the outlook.
Though on a small base, Apple’s revenue has been growing at a quick pace in India for the past few quarters. In the October-December period, its India revenue rose 38%, compared with 11% in overall emerging markets and 14% in Greater China. It sold 8 lakh iPhones in India in that quarter, which was an all-time high. Apple plans to offer value-added services through its company-owned online store to differentiate with other online sellers and ecommerce marketplaces in India, the executive said.
The company will enable purchasing from the Apple Store app in India, he said.
The Apple online store will offer customization of hardware for Mac computers, company-certified refurbished products for which it has already sought approval from the Centre, and laser-engraving for customer’s personal message on the products.
“As in any market where Apple has its company-owned stores, it would drive much of the revenue and customer traffic from them in India too,” the executive said. The huge discounting of Apple iPhones online has already moderated in the past one month after the Indian operation got under greater control from the company’s headquarters in Cupertino, California, the executive said. For instance, the discounts that used to be up to Rs 6,000-7,000 for iPhones has come down to Rs 1,000-3,000.
The second executive said Apple’s own offline and online stores will operate as part of an omnichannel, which including other things will allow consumers to purchase online and then pick up the product from an offline store. Apple has started preliminary internal research to identify locations of company-owned stores, the executive said.
Apple has started controlling its sales network through a new website, indiaishop.in, floated by its four distributors – Ingram Micro, Redington, Beetel-Brightstar and Rashi Peripherals, both executives said. Apple owns the copyright of the website and will list all the authorised sellers of Apple products in India on it to ensure price control.