Apple, Samsung take the E-com route to boost consumption

Apple, Samsung take the E-com route to boost consumption
Apple, Samsung take the E-com route to boost consumption

Global smartphone market leaders Apple and Samsung are eager to connect with Indian consumers. So, they are increasing their online presence in this country, a clear indication that foreign investors think discretionary spending will pick up very soon.

In yet another vote of confidence in the Indian economy and the Narendra Modi government's management of it, two of the world's largest mobile phone makers, US giant Apple and South Korean behemoth Samsung, are stepping up their investments and marketing footprint in the country.

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Apple to launch online store in India on September 23

Next week, on September 23, Apple will, for the first time, open its online store in India. These will follow the same format as its online stories worldwide and sell the full range of Apple products to Indian consumers.

Samsung to step up sales through its online channel

In an unrelated development, Apple's South Korean rival Samsung has set a target of selling 20 million budget and mid-range Galaxy M series phones in India by December. This initiative also marks Samsung's renewed effort to sell its phones online in India through Samsung.com.

These moves come close on the heels of these two global market leaders in the mobile phone industry committing to set up more factories in the country to make and export high end smartphones costing more than $200 each from India. Their target: Exports worth about $50 billion each over the next five years.

Apple, Samsung want to connect better with Indian consumers

Customers stand in a queue while purchasing mobile phones at a shop at Hazratganj Market during lockdown. Market analysts are predicting bumper festive season sales for e-commerce this season.
Customers stand in a queue while purchasing mobile phones at a shop at Hazratganj Market during lockdown. Market analysts are predicting bumper festive season sales for e-commerce this season.

Apple CEO Tim Cook tweeted: “We know how important it is for our customers to stay in touch with those they love and the world around them. We can't wait to connect with our customers and expand support in India with the Apple Store online on September 23.” For good measure, he added the Indian tricolour at the end of his quote.

“For Samsung, the online store is a key focus area for growth and we are targeting 10 per cent of our overall business in mobiles and consumer electronics through his important channel... With the launch of new innovative programmes, Samsung.com will become the shopping destination of choice for mobile and consumer electronic products across key consumer segments,” the Times of India quoted a senior Samsung executive as saying.

E-commerce sector expected to boom this festive season

These initiatives come at a time when market analysts are predicting bumper festive season sales for e-commerce as a whole this season. This will be driven by increased purchasing power in Tier II towns and beyond, which are flush with funds from a good winter harvest. The summer harvest, helped by bountiful monsoon rains, is expected to further increase rural prosperity and purchasing power.

It should be noted here that although the farm sector accounts for only about a sixth of India's GDP, rural India is home to about 60 per cent of India's population and supports 46 per cent of all economic activity in the country.

Looking beyond the Covid-induced slowdown

Market analysts see a revival in consumer sentiment when it comes to purchasing electronics this festive season.
Market analysts see a revival in consumer sentiment when it comes to purchasing electronics this festive season.

The decision of these two global smartphone majors to beef up their marketing muscle in India indicates that they are looking beyond the current Covid-induced slowdown, which may lead to a full-year contraction in the Indian economy for the first time in more than 40 years.

This will be Apple's second big bet in India in the space of two months. In August, it had announced plans to invest billions of dollars in India through its three contract manufacturers Foxconn, Pegatron and Wistron to set up factories to de-risk its supply chain from its current over-reliance on China. Samsung, too, had announced similar plans to invest in setting up more factories in India.

Both these companies are investing in India in response to the Government of India's $6.6-billion production-linked incentive (PLI) scheme and two other incentive programmes.

Both these companies are investing in India in response to the Government of India's $6.6-billion production-linked incentive (PLI) scheme and two other incentive programmes - the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) and Modified Electronics Manufacturing Clusters (EMC 2.0) Scheme - that offer an additional $1.5 billion.

Consumer sentiment likely to improve in the months ahead

The entry into India's online mobile phone market shows that despite the Covid-induced slowdown in this country, deep pocketed foreign MNCs, who conduct extensive market research before launching products or making fresh investments, obviously see a revival in consumer sentiment this festive season.

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