The Apple-Samsung war is intensifying in India, with both tech giants vying for more visibility and retail space.
Infiniti Retail’s electronic retail chain Croma has become the latest battleground, with Apple opening its 500 sq ft shop-in-shop format at Croma, forcing Samsung to re-negotiate with Croma for providing better visibility.
Threatened by the Apple shop-in-shops, Samsung is planning to increase its investments on marketing spends and better visibility at retail outlets and is in discussion with Croma for this. The company has raised concern over its brand image getting impacted and marginal impact in sales in the five Croma stores having the Apple shop-in-shops, sources said.
While 40% (value) of Croma’s revenue comes from sales of Samsung products, Apple contributes around 25% (value) to sales of Croma, say Croma officials.
A senior official from Samsung told FE, “There has been some impact on our sales because of Apple having better visibility in Croma stores. Apple is paying higher for the shop-in-shop format, as they have taken a larger space. But we also have plans to increase our spends on marketing, promotions and for better visibility at retail outlets.” He, however, did not share details of the investment.
A Samsung spokesperson wrote in an email in response to a query, “Samsung remains committed to making people’s lives better by introducing innovative products, and through better consumer experiences. We have a retail footprint of 1.5 lakh point of sales across the country, and we work closely with all our partners to bring the best experience to our consumers.” Samsung and Apple compete mainly in the premium segment. In calendar year 2015, India shipped approximately 97 million smartphones, of which 3.4% were phones costing above Rs 30,000. While Samsung had 46.1% market share (volumes) in the premium category in 2015, Apple’s market share (volume) was 43.8% last year, according to CyberMedia Research data. The total smartphones sold by Samsung were 25 million, whereas Apple sold 2 million phones.
“We are seeing a shift in Samsung’s focus towards the premium segment. And Apple is very close to Samsung in that segment. Strengthening of channels through a tie-up with Croma would definitely have a positive impact on any brand, including Apple. Nevertheless, Samsung has a very strong brand presence in India and several options for consumers, which has been a key reason for any player in India to succeed,” said Faisal Kawoosa, lead analyst (telecom), at CyberMedia Research. However, in the high-end category, with Apple offering EMI facility and recent moderation of prices, many customers are opting for the brand, he added.
Sources also told FE that Croma had shelved plans of opening an Apple store at the Oberoi Mall in Mumbai for the time being after Samsung expressed concern. One reason could be that sales of Apple have not been up to Croma’s expectations. “Sales of Apple products are far below expectations, but we hope they would pick up in the future,” said a Croma official. Avijit Maitra, chief executive officer, Infiniti Retail, however, said that all is well between Samsung and Croma and the company will add two more Apple outlets by the end of this year.
