New country head of Apple India Michel Coulomb is in a process of restructure the distribution and sales chain strategy for iPhones, iPads and Mac computers. For consumers, this will mean Apple products will cease to be discounted as the number of distributors is pared and the company takes a hard line on maintaining prices.
The thinking behind the move is that the brand had been diluted by giving distributors a free hand to sell to any retailer, even at lower prices, three persons directly aware of the development said.
The earlier ‘open distribution’ strategy at Apple India had created a lot of discontent amongst its offline trade partners, since the distributors would often indulge in wholesaling to achieve targets leading to rampant deep discounting online and fluctuation in prices almost every day. “So much so, Apple was even considered as a discounted brand.
Coulomb, is planning to keep only Two national distributor- Ingram Micro and Redington. Rest Brightstar, Rashi Peripherals and HCL Infosystems will be phased out soon. Reason being these two distributors can ensure on the product reach across the country.
The aim is to resolve confusion over pursuing a volume growth strategy and keeping the brand’s premium status intact, with Coulomb coming down firmly on the side of the latter, they said. The terminations will take effect early next year.
Besides, as part of the new strategy, Apple will sell directly to large retailers and online partners, which will also mean better price control. This will be undertaken from the new distribution centre, which Apple has set up at Bhiwandi near Mumbai.
The report says, Apple India used to give a free hand to its distributors as they sought to meet the sales targets.
Online accounted for 55% of iPhone sales, hitherto driven by discounting. “While there will still be special promotions online for Apple products, the days of deep price cuts seem to be over.
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