Smaller cities account for 60% of Apple's sales in India
Over 60% of Apple's sales in India—particularly iPhones—now come from smaller tier-2 and tier-3 cities, per The Economic Times. Earlier, tier-1 cities accounted for 65-70% of sales. This change began during the COVID-19 pandemic when people moved back to their hometowns and "good" smartphones became essential for remote work. Over nine million iPhones are expected sold in India in 2023, with most of these sales coming outside Delhi, Mumbai, Kolkata, Bengaluru, Chennai, Hyderabad, Ahmedabad, and Pune.
India's burgeoning middle-class drives premium tech adoption
The increase in premium tech adoption among India's growing middle class has played a role in Apple's success in smaller cities. Prabhu Ram, Head of Industry Intelligence Group at CyberMedia Research, said, "Consumers, particularly in Tier II and III cities, are dedicating close to a whopping 143 hours annually shopping online for their next tech upgrade, fueling a surge in premium device adoption." Apple has capitalized on this trend by expanding its retail footprint and offering seamless online experiences.
Apple mainly served metropolitan cities earlier
"Before the pandemic, Apple's focus was merely on Tier-I or maximum Tier-II markets through its premium resellers and broader regional distributors as bulk of the demand came from and was catered to tier-1 markets which was more than 65-70%," Neil Shah, VP of Counterpoint Research, told ET. Apple then shifted its focus to online sales and partnered with e-commerce portals and large retail chains like Croma and Reliance Digital to reach deeper into smaller towns.
Easier access to credit boosts sales
Easier access to credit has also helped Apple's focus on online sales and penetration into smaller cities. Portals like Amazon, Flipkart, and Apple's banking partners offered no-cost EMI options to customers, providing payment flexibility that was previously difficult with premium offline reseller chains. According to analysts, India has over 850 million mobile phone users and could have more than a billion smartphone users in the next five years.
Apple's growth and manufacturing in India
Since 2020, Apple has doubled its revenue in India, reaching Rs. 50,000 crore in the current fiscal year. The company has also heavily invested in local manufacturing and encouraged partners like Foxconn to establish additional production plants in the country. India is quickly becoming Apple's largest iPhone manufacturing hub outside of China, with around 70% of made-in-India iPhones being exported. Apple's CEO Tim Cook recently described India as a 'huge opportunity' for the company.
