updated 07:37 pm EDT, Fri October 4, 2013
Company turns to franchise model to help expand retail presence
According to sources present at a confidential meeting between Apple India executives and the CEOs of 20 top retailers, the iPhone maker has bold plans to create 100 standalone franchise stores in the top 50 second- and third-tier markets in the country, and will also create "store within a store" (SWAS) experiences for smaller markets in a new partnership with India's top smartphone and consumer electronics chains, since Apple does not yet have any official stores there.
Apple India is looking to set up these stores within the current fiscal year, which for Apple began on October 1. The meeting between potential retail partners and Apple was held by Maneesh Dhir and Sanjay Kaul, reports the country's Economic Times newspaper, who have spent the last three years building an executive team, shifting the emphasis of resellers to the iPhone, lobbied to shorten the wait on new products arriving in India and built stronger relationships with the company's current 65 or so exclusive partner stores.
By the end of 2015, the iPad maker plans to have some 200 franchise stores, and Dhir and Kaul used the meeting to unveil new plans to focus on the iPhone, the iPad and the iPod touch as part of the expansion of retail outlets. The company has made some proposals to the larger retail chains, it was revealed, and is actively scouting for additional franchise partners. Apple's strategy appears to favor rapid expansion in India ahead of any attempts to build its own network of official Apple Stores, at least in the short term.
The plan is reminiscent of Apple's dependence on independent exclusive resellers during the company's pre-Apple Store days. The strategy allowed Apple to have retail and repair presences throughout many countries without the expense of maintaining its own retail chain. Once former CEO Steve Jobs and former retail head Ron Johnson hit upon an ideal store configuration, the company began to build what is today a nearly 415-strong network of official stores, displacing resellers in some cities while strengthening independent stores and SWAS retailers in areas where Apple hadn't or wouldn't put its own stores.
The plans revealed to the paper through sources who attended the meeting make no mention of Apple opening any of its own stores in India at present, though the company's increasing focus on the region suggests that a a few top-tier markets may eventually see flagship openings on part with those in China or Japan. Apple has been experiencing some success with growing the iPhone brand in the Android-dominated country through aggressive marketing, rebate and trade-in programs, as well as experimenting with payment plans to help transition the country's dominant prepaid market into a postpaid model.