Apple's retail foray in India: How will it affect the tech behemoth's fortunes?

Finally, it’s here. Twenty-seven years after Apple entered India, 23 years since it opened its first retail store in the US and more than two years after Apple’s online store was launched in the country, the physical Apple Store has reached Indian shores. On April 18, people lined up to click selfies with Apple CEO Tim Cook—who was in India with Senior Vice President of Retail + People Deirdre O’Brien—at the launch of the first store in Mumbai’s Bandra-Kurla Complex (BKC). Two days after throwing open the doors of the BKC store—Apple’s most sustainable company-owned store till date—the Cupertino-based tech giant welcomed people into its store in Delhi’s Saket.

Apple’s expansion into the retail space and the presence of Cook to inaugurate the stores reiterates the growing importance of India for the company. “I’m very bullish on India,” Cook had said during a recent earnings call. And a day ahead of the Mumbai store’s shutters going up, Cook had said, “India has such a beautiful culture and an incredible energy, and we’re excited to build on our long-standing history—supporting our customers, investing in local communities, and working together to build a better future with innovations that serve humanity.”

The Apple Stores aren’t just about retail expansion, though. They will further strengthen the overall experience of being in the Apple ecosystem. At these stores, consumers not only get an opportunity to touch, feel, explore and experience the devices, they can spend as much time as they want with the devices without having to worry about buying the hardware. Beyond hardware, these stores act as customer service touch points and a community centre for consumers. “Apple will be able to control the end-to-end user experience, and this will further take its brand image up one level. We have seen many stories around the world of consumers sharing positive purchase experiences from Apple-branded stores and India will be no different,” says Prachir Singh, Senior Research Analyst at Counterpoint Research.

But why did Apple pick Mumbai and Delhi for its first two retail stores in the second-largest smartphone market in the world? According to Counterpoint Research’s city level tracker for India, both Delhi and Mumbai have around 10 per cent market share for Apple’s iPhones, with Delhi being slightly ahead. Experts believe these stores will boost iPhone adoption in the country. “We will see a similar trend going forward. Both of these cities are top markets for Apple and will be the market drivers for the brand,” says Singh. Prabhu Ram, Head of Industry Intelligence Group at CyberMedia Research (CMR), agrees. “The launch of the new Apple flagship retail stores in Mumbai and Delhi, backed by aggressive sales initiatives and increased domestic manufacturing, will fuel Apple’s growth momentum in the year ahead in a market that remains a crucial future growth driver for Apple.” CMR estimates India’s iPhone shipment figures to be 8 million in CY23.

In terms of overall market share, the company has grown its share of shipments to more than 4 per cent in 2022 from 1 per cent in 2019. This number could cross 5 per cent in 2023, says Counterpoint’s Singh. Despite India being a price-sensitive market dominated by sales of smartphones below `20,000, since the iPhone is an aspirational product, it is likely to fuel further growth for Apple, say experts. Besides, on the back of Make in India, Apple has found the country to be a trusted partner in the global supply chain and has been expanding its production base in the country through its manufacturing partners Foxconn, Wistron and Pegatron.

Incidentally, this was Cook’s second visit to India since he took over as CEO. And the Apple CEO had a packed schedule, meeting Reliance Industries Chairman Mukesh Ambani and Tata Sons Chairman N. Chandrasekaran in Mumbai. This was followed by a meeting with Prime Minister Narendra Modi in Delhi, where he also met Ashwini Vaishnaw, Union Minister of Railways, Communications, Electronics and Information Technology; and Rajeev Chandrasekhar, Minister of State of the Ministry of Electronics & IT (Meity).

Cook was also spotted with celebrities during his visit to Mumbai. A day before the Mumbai store opened its doors, he was seen engaging with actors Madhuri Dixit and Raveena Tandon and former cricketer Anil Kumble, among others. “Apple’s narrative while telling the store story has been creativity, and all these [actors] are idols of creativity for us and the world. We may see them being engaged for activities at these stores anytime soon,” says Faisal Kawoosa, Chief Analyst at Techarc, a technology analytics, research & consulting firm. “Apple will work strongly on community activities through these stores and these celebrities will be important and integral part of the engagements.”

One thing is for sure. With ready access to Apple’s products and engagement with store personnel who will also guide customers on how to switch to Apple, the tech giant looks set to expand its army of users in India.

@nidhisingal