Smaller towns turn big market for Apple, account for 60% of iPhone sales

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Smaller towns and cities are emerging as huge market for Apple, as 60 per cent of its sales, mostly iPhones, are coming from tier-II towns, reported The Economic Times (ET). Earlier, tier-1 cities accounted for 65-70 per cent of Apple’s sales, however, this has changed in the last few years.


The shift in sales post Covid-19


Industry experts argue that the shift in Apple products’ sales happened after the Covid-19 pandemic as thousands of people moved to their hometowns, and having a good smartphone became a necessity due to the work-from-home set-up, the ET report said.


Talking about the shift, Vice-President at Counterpoint Research, Neil Shah told ET, “Before the pandemic, Apple’s focus was merely on Tier-1 or maximum Tier-II markets through its premium resellers and broader regional distributors as the bulk of the demand came from and was catered to tier-I markets which were more than 65-70 per cent of total sales.”


Shift in Apple’s channel strategy


To expand its sales, Apple diversified its channel strategy in 2019 and increased its focus on e-commerce platforms as well as large retail outlets such as Croma and Reliance Digital stores. This was helped by the shift in Indian consumers’ outlook as they became comfortable buying expensive products online.


Moreover, Apple also leveraged the option of no-cost EMI for its products. Combined with an expansive network of sales, this resulted in Apple products reaching more customers living in different areas.


According to the ET report that cited data from Counterpoint Research, 9 million iPhones are expected to be sold in India in the calendar year 2023, 60 per cent of this sale would happen outside of Delhi, Mumbai, Kolkata, Bengaluru, Chennai, Hyderabad, Ahmedabad, and Pune.


Seven in 10 iPhones made in India are exported, according to industry experts. Apple is leading in the government’s efforts to make India an export hub of smartphones while over-achieving its targets. Industry executives have said that the company is using the PLI benefits received from the government to offer selective promotions and develop its retail footprint, the ET report stated.

First Published: Dec 18 2023 | 12:50 PM IST

According to a report by The Economic Times (ET), smaller towns and cities in India have become a significant market for Apple, with 60% of its sales, predominantly iPhones, coming from tier-II towns. This marks a shift from the previous trend where tier-1 cities accounted for 65-70% of Apple’s sales. The change in sales patterns is attributed to the impact of the Covid-19 pandemic, as many people moved to their hometowns and the need for a good smartphone became essential for remote work setups.

Industry experts suggest that Apple’s focus on tier-1 and tier-II markets was primarily due to the higher demand in these areas before the pandemic. However, the company has since diversified its channel strategy, increasing its presence on e-commerce platforms and large retail outlets like Croma and Reliance Digital stores. The shift in Indian consumers’ outlook towards online purchasing of expensive products and the availability of no-cost EMI options have further contributed to Apple’s sales growth in different regions.

Counterpoint Research data cited in the report indicates that 9 million iPhones are expected to be sold in India in 2023, with 60% of these sales occurring outside major cities like Delhi, Mumbai, Kolkata, Bengaluru, Chennai, Hyderabad, Ahmedabad, and Pune. Additionally, industry experts note that seven out of ten iPhones made in India are exported, making Apple a key player in the government’s efforts to establish India as a smartphone export hub.

The report also highlights Apple’s utilization of the Production Linked Incentive (PLI) benefits received from the government to offer selective promotions and expand its retail footprint. Overall, Apple’s focus on smaller towns and cities in India, combined with its channel diversification and strategic use of government incentives, has resulted in increased sales and market penetration.,

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