Apple India all set for a sales revamp, aims to deliver “complete sales experience”

• Apple’s sales strategy has stagnated its smartphone market share at 2-3% over five years. It's time for a revamp.
  
• Company plans to blacklist any retailer that picks up discounted stock from a wholesaler.
  
• They also want to do away with neighbourhood stores as they do not offer a complete sales experience.

Apple India is all out for a sales revamp. It will now be blacklisting any retailer that picks up stock from a wholesaler at a discounted price.

This is being done to check the rapid sales expansion of Apple products into small neighbourhood stores and to sell at the maximum retail price, like Apple does in the US.

This move by the iPhone maker will take India back to the earlier practice during which the retailers could offer discounts only under the Apple-backed consumer promotion strategies.

The company also plans to clamp down on wide availability of products and neighbourhood stores and is looking to sell only via stores that provide a complete sales experience.

For starters, they stopped selling the Mac computers from these stores last year.

Last month, they also tightened their distribution by bringing down their national distributors from five to two. They have linked the retailers’ billing system with a distributor so that retailers cannot buy from unauthorised sources. If the retailer does not follow the sales terms, it will not be eligible to offer affordability schemes like EMI (equated monthly instalment) and cashback to consumers and their supplies might also be stopped. Distributors will face restrictions as well - they cannot sell out of their ‘territory’ or undertake any wholesale deals.

The aim is to bring the focus back on large exclusive stores, Apple authorised multi brand stores and retail chains since these can offer the right sales experience. Apple will sell only in limited neighbourhood stores that generally sell multiple brands. This also means that the company will be very selective in choosing partners for its customised smaller exclusive Apple stores a 1,000 of which it plans to open pan-India.

The previous India Sales head, Sanjay Kaul, had been trying to push sales through discounts and rapid expansion. His strategy didn't seem to work since its smartphone market share remained stagnant at 2-3% over the last five years. Several of Apple’s trade partners also felt that the discounting was eroding product prices and favouring online stores. It diluted the brand’s ‘premiumness’ or brand identity and led to a decline in the average selling price when competition in the ₹30,000-plus Indian smartphone market was at an all time high led by Samsung, OnePlus, Google, or even by brands like Xiaomi and Oppo.

Therefore, the “cleaning up exercise” is going to be executed by Michel Coulomp who replaced Kaul, in December.

To execute the exercise, Apple has made a lot of changes in its team. With the exit of three senior sales executives, Apple might put in place a new sales team. Other mid-level sales executives are also expected to departure soon. Apple has also created a new sales audit team under the chief financial officer Gaurav Duggal. The team will be randomly picking products to ensure that there is foolproof compliance of its sale processes across all retailers and wholesalers.

Though Apple is trying this “clean up”to deliver a complete sales experience that would in turn help its stagnant smartphone market share, it may not be the best idea. Bloomberg believes that Apple might be in this situation as it has failed to develop important carrier relationships and iPhones are especially expensive in India due to customs tariffs. Therefore, clamping down on the small retailers may not be a solution to the larger problem.