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

Earlier, tier-1 cities accounted for 65-70% of Apple's sales, however, this has changed in the last few years

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.