Apple wants to move in to smaller Indian cities and towns according to reports that surfaced last week. The company has reportedly identified 50 places in India, where its reseller network will be asked to expand, and there are also talks about in-store kiosks that will sell Apple products through multi-brand retailers. Will this help gain a foothold in the Indian market or will it be another failed attempt to woo Indian buyers?
The colourful bunch
I think it is a good move on Apple's part to expand to Tier II and III Indian cities. Apple as a brand is already known in most major cities, but the same may not necessarily be the case in Tier II and Tier III towns. But let us not forget that these places have their fair share of customers who can afford Apple products. An aspirational segment which immediately comes to mind when talking about Tier III or rural areas is luxury cars. According to this BBC report, the luxury car segment in India has a lot of rural buyers. So it's a no-brainer for a company like Apple to consider expanding to these areas via their resellers.
Of course, the returns will not be immediate and it will take some time for Apple to stand out in rural markets. In the cellphone segment, which is the most popular segment in these areas vis-a-vis PCs and desktops, it is already high time Apple made its presence felt. Unlike major cities in India, where we are wired into what's happening globally, that may not be the case in Tier II and Tier III towns as priorities are different. So Apple's every move and leak may not be followed as religiously in these towns. Factors such as the rate at which local cellphone brands are expanding, the aggressive marketing by Samsung (Apple's biggest rival) and lack of any marketing activities by Apple itself do not help.
Having dedicated centres where people from Tier II and III towns can actually get a hands-on time with Apple products coupled with decent EMI options can help Apple sell more of its products as compared to its current sales numbers. I don't think Apple would change its pricing strategy just for rural areas. The very fact that there is no dedicated Apple centre in India till date, gives an impression that Apple is still weighing its options regarding India, and that it is content with its resellers. But if Apple wants to expand to smaller towns via its resellers, then it's just going to help the brand and is a wise move.
The decision to expand to Tier II and III cities is a tricky one. Nokia ruled the roost in these cities long after smartphones started flooding the market in metros – it takes a while for a majority of the audience to give up something familiar and move to a new concept. Now with Android smartphones seeing a large enough audience in the smaller cities as well, and companies like Samsung, Sony and even LG offering premium smartphones and mid-range ones and companies like Gionee, Lava and Micromax offering entry-level and mid-range devices, Apple might not find an audience or a foothold when it comes to the iPhone in these cities. The iPad could see a considerable audience though. Add to it the closed nature of the OS and the fact that you need have to sync with iTunes, might be a bit of a deterrent for a major portion of the audience. Expecting smartphone users in these cities to unlearn the ease and familiarity of Android and opt for an OS that is vastly different is a gamble that Apple is taking – that's not to say that they would have no takers. But if they're looking to dent the stronghold that companies like Samsung have then they are in for a massive uphill trek. The initial hype of an Apple exclusive Store in a city could be followed by a lull that Apple might have to work hard to tide over. Freebies, a good EMI system and some advertising and marketing could work in their favour.
I think it's high time Apple started focusing on such cities as these places have a strong buying muscle for premium products, even though they may not look it. Phones aside, this is a great opportunity for Apple to expand its notebook line up as well and expose customers to Mac OS. Experience zones are key to exposing customers to new technologies and products and what better way to do that than an Apple store. I think Apple's biggest threat right now is Samsung and this is not only restricted to smaller towns. If Apple has to break this Korean stronghold in peoples minds then they need to be able to walk into a store and try out the product themselves. The launch of a new iPhone is no longer restricted to tech shows on our TV channels, it's big news and is carried across all news channels, big and small and in every conceivable Indian language. Everyone is aware when a new iPhone launches but not everyone has access to it and I feel this move could boost Apple's reach at the very least.