Apple Plant in India Will Benefit Retail Sector, Says Google Official

"If Apple sets up a plant in India and are able to bring more products made for India, they might grow overall industry for smart phones, which will be good for overall retail," Google India Industry Director Nitin Bawankule told PTI on the sidelines of release of a report 'Digital Retail 2020' by Google and A T Kearney in Bengaluru.

Bawankule was replying to a question on how much of business sense does it make for retailers and e-commerce players in India if Apple sets up a plant in India.

"Now, whether it will impact online or offline it doesn't matter, I think, but if Apple decides to set up one such plant, it's great for the industry," he added.

The US-based giant plans to set up single-brand retail stores in India and has sought exemption from local sourcing norms on the ground that it makes state-of-the-art and cutting-edge technology products for which domestic sourcing is not possible.

Recently, Apple CEO Tim Cook visited India to push for India retail plans. He met Prime Minister Narendra Modi and discussed the "possibilities of manufacturing" and tapping the young talent pool in the country.

The telecom and retail industry are closely following Apple's foray into the Indian market to understand how much business sense it will make for telecom, retail and ecommerce players in India, if Apple sets up an iPhone plant in India. The report projects that e-tailing will become a substantial channel for the organised retail sector, contributing as much as 25 per cent of the total organised retail sales in by 2020 and will reach $60 billion in gross merchandising value, Bawankule said.

The report predicts that the total number of online shoppers will grow to 175 million by 2020 and one third of customers will drive two third of total online shopping spends, he said.

As per the report, value added service will be a key differentiator and over 90 percent of the online buyers will be willing to pay for premium value added services, Bawankule said.

Over 46 percent of online buyers said that they will be willing to pay extra charges for faster delivery and 37 percent for hassle-free return and 35 percent were willing to pay more for extended warranty, he said.

Google SEA and India VP and Managing Director Rajan Anandan said, "The e-tailing industry in India is at an inflection point and will touch 175 million online buyers by 2020."

"Having said that the next three to four years will be critical for the industry to get on the path of sustained profitability," Anandan said.

"Innovative delivery models and creating omni-channel presence will help bring on board new online shoppers and help grow the overall share of e-tailing from the organised retail Industry in India," he said.

Partner with A T Kearney, Ajay Gupta, said the data reveals that majority of buyers will continue to purchase online even if there are no discounts. "With the right game plan and focussed efforts the e-Tailing industry will grow at a healthy CAGR of 40%+," he added.

Some of the other findings of the report include a '5X' growth in number of women shoppers by 2020 and women currently shopping online will more than double their share of online spend, Gupta said.

"They are likely to spend more on lifestyle categories, namely apparel and accessories, and are looking for the latest trends and brands online," he said.

The lifestyle (apparels and accessories) as a category will overtake consumer electronics to become the largest online category by 2020 at 35 percent of the total online spends, Gupta said.

Consumer electronics will be at 20 percent by 2020. "New buyers will more likely start their online purchase journey with Lifestyle, followed by Consumer Electronics and existing buyers will spend more on Lifestyle driven by availability of latest designs," Gupta said.

Niche categories like home (furniture and furnishing) and personal care will see high adoption due to assortment and convenience of purchase especially in Tier 2 cities, he added.

By 2020, 55 percent of online volumes will be driven by cashless transactions. Mobile wallet share will double by 2020 to reach 15 percent from current eight percent,he said. "The base of online sellers will need to grow by 5X+ to cater to the increase in demand from users across geographies and improve delivery capabilities," he said.