Retail News India Reliance Retail will shut 16 of its 20 exclusive Apple iStores as several of them don’t comply with the global store design specified by the maker of iPhones and iPads, which could disrupt the US Company’s bid to intensify sales efforts in India, where its share of the smartphone market lags way behind leader Samsung.
On the other hand, the move will allow Reliance Retail to step up the focus on its new multi-brand format, Digital Xpress.
Reliance Retail, part of Mukesh Ambani-headed Reliance Industries Ltd, 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. The company 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. Reliance wasn’t enthusiastic about complying with Apple’s strict standards and what it regarded as the highhandedness of the US company since it was not getting the desired returns, said the people cited above.
Apple’s new norms include 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. “Of the 16 stores, 12 of them did qualify as per the new Apple norms. But the group decided to convert them into Digital Xpress (outlets) since the locations are prime. These stores will also sell Apple products along with all other leading electronic brands,” said one of the executives cited above. “Moreover, since Apple is now focusing on iPhones and iPads more than Mac computers, which requires specialised selling skills, consumers would buy these products more from multibrand mobile phone stores with Apple expanding its distribution reach,” said another of the executives.
Also, iPhones and iPads have a relatively lower margin than Mac computers.
The Digital Xpress format emphasises technology solutions and will be used as sales points for the 4G service that Reliance will launch through its telecom subsidiary, an executive said. Reliance has more than 30 Digital Xpress stores, apart from 154 Reliance Digital stores that sell the entire range of electronics goods.
Reliance and Apple will continue their, albeit diminished, relationship, the executives said. An email sent to a Reliance Retail spokesperson on Tuesday did not elicit any re sponse. Apple did not respond to an email sent to regional headquarters in London.
There are around 60 exclusive Apple stores in India. Apart from the Reliance-run iStores, another 10 of these are in the process of shutting down since they do not comply with the new design norms. Apple wants to rapidly scale up its retail presence in India, which includes setting up more than 200 exclusive stores in the next two years, besides entering tier II markets.
Source: retail-news
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