The landscape of Apple’s market in India has undergone a remarkable transformation in recent years, with smaller towns and cities emerging as pivotal contributors, accounting for a substantial 60% of the tech giant’s sales. This significant shift in consumer behaviour has been accredited to several factors, including the disruptive impact of the COVID-19 pandemic and Apple’s strategic initiatives to extend its market reach beyond tier-I cities.
Before the global health crisis hit, Apple primarily concentrated on tier-I cities alongside select tier-II urban centres, which constituted a considerable chunk of its sales figures. The demand for Apple products was predominantly centralised in these urban hubs. However, the onset of the pandemic precipitated a pronounced change in consumer behaviour. The remote work scenario prompted thousands to relocate from major cities back to their hometowns. With an increasing reliance on reliable and sophisticated smartphones, the demand for Apple products surged significantly in smaller towns and cities.
Recognizing the evolving Indian market dynamics, Apple adjusted its distribution strategy in 2019 to better cater to diverse regions. Emphasising e-commerce platforms, the tech giant made its products more accessible across the country. Furthermore, Apple expanded its presence in prominent large-scale retail outlets such as Croma and Reliance Digital, effectively widening its consumer base. To further enhance accessibility, Apple introduced consumer-friendly schemes like no-cost EMI options, making its premium products more affordable and appealing to a broader audience.
According to insights from Counterpoint Research, an estimated 9 million iPhones are projected to be sold in India in the calendar year 2023, with a whopping 60% of these sales anticipated to originate from outside tier-I cities. This highlights the substantial untapped market potential existing in smaller Indian towns and cities.
Apple has been strategically diversifying its supply chain, diminishing its reliance on China, and bolstering its manufacturing operations in India. The country has emerged as Apple’s leading iPhone manufacturing hub outside of China. Benefiting from the smartphone production-linked incentive (PLI) scheme, Apple’s three contract manufacturers in India are actively ramping up local iPhone production. The company aims to manufacture iPhones worth Rs 1 lakh crore locally in the current fiscal year, catering to both domestic and export markets. Focused on providing an exceptional customer experience, the company aims to cross-sell other Apple devices and services, fostering deeper integration within the Apple ecosystem for its users.
RTM Watch’s Take
The growing market share of Apple in smaller cities reflects the changing dynamics of the Indian market. The shift in consumer behaviour, driven by the pandemic and increased accessibility to Apple products, has opened up significant opportunities for the company. As the demand for premium smartphones continues to rise, Apple’s strategic focus on India, including local manufacturing and retail expansion, positions the company well to capitalise on the potential of this market.
