Economic Times: December, 2016
Kolkata: Apple will move to a dedicated distribution centre for its products in India for the first time, consolidating its logistics operations to ensure common pricing for offline and online sales and acquiring greater control over the supply chain.
Apple’s global logistics partner DB Schenker will own and operate the centre, which will come up at Bhiwandi near Mumbai, two senior industry officials said. DB Schenker, one of Europe’s largest logistics companies, has signed an agreement to run the Indian centre, which will help to ensure that Apple products are rarely sold out at the retail level, as it happened after the launch of the iPhone 7 and 7 Plus in October.
Currently, iPhones, iPads and Mac computers are brought into India through Chennai, Bengaluru, Mumbai, Chandigarh, New Delhi and Hyderabad – where value-added tax rates vary – and transferred to distributors from the airport itself.
Online sellers often source the devices from low-VAT markets, gaining a price advantage over their offline rivals.
“The distribution centre will allow Apple to stock its products adequately, will ease operations and streamline its logistics and supply chains. It will also help in maintaining uniform price for its products, which will become much easier under the Goods and Services Tax regime,” said one of the executives.
Email queries sent to Apple and DB Schenker seeking comment did not elicit any immediate response.
Apple is expanding in India, widening distribution to the smaller cities and working with application developers. The company was the country’s second-largest smartphone maker by revenue in 2015-16, pipping local rival Micromax Informatics after sales increased 54% to Rs 9,997 crore.
One industry executive said the distribution centre will help Apple provide hardware such as Mac computers tailored to the needs of business customers.
“Earlier, this flexibility was not there. The company is currently reviewing this and any such effort will be for enterprise clients only,” he said. Apple allows customisation only for consumers who place orders through its online store, which would require retail foreign direct investment approval from the government. Its retail and online store plans are still stuck after the government revised its FDI policy this year.