Since the past two years Apple's online presence in India has increased substantially. Thanks to its participation in most sales conducted during festivals, the online trade has formed a major part of its total sales in the country, accounting for over half of total amount in India.
The company is still far from attaining big numbers in terms of market share but the online sales model has helped boost numbers with the help of discounts and special exchange offers.
Reportedly, now the company is taking a u-turn with its online strategy. According to a report by The Economic Times, Apple will stop offering discounts on online platforms altogether, following the appointment of their new India Operations head, Michel Coulomb.
The report suggests that there's a substantial cut in distributors margins which might now range around 1.7 per cent to 2.5 per cent. The previous profit margins enabled retailers to push out iPhones on a discounted price.
The company is also prepping the Indian market for its exclusive stores that are scheduled to launch in the country around 2020-21. It plans on fattening the profit margins for exclusive Apple stores from 4-5 per cent to 5-7 per cent.
The change in hierarchy came into effect when Apple experienced a slump in sales in India. In the report, people with knowledge about the matter suggested that the new head is expected to bring more discipline to the company's sales.
They go on to add that Apple's rejig is in place to increase sales from Apple's own stores and to bring uniformity in the sales margins of online and offline stores.
The government, on January 10, allowed 100 per cent foreign direct investment (FDI) in single-brand retail via automatic route and eased a rule on 30 per cent mandatory local sourcing of products for five financial years after opening the first Indian store.
The entity will be required to meet the 30 per cent sourcing norms directly towards its India operation, on an annual basis, after the five-year period. The affect of this new rule on the prices of iPhones is still unclear as the company still imports most of its products sold in India
Copyright©2021 Living Media India Limited. For reprint rights: Syndications Today