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Apple gets into online retail in India with Flipkart

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Image: AFP/Getty Images

Be prepared for fewer discounts on the iPhone 7 and iPhone 7 Plus this year in India.

In an attempt to better control the pricing of its products, Apple has partnered with Flipkart, Indias largest e-commerce website. Though Flipkart has always sold Apples products, this is the first time it will directly source inventory from Apple’s distribution channel in the country.

Apple does not sell products directly in India and has a network of distributors and authorized resellers. Unlike the US and other markets, where one can buy Apple products directly from the company’s website, buyers in India are directed to third-party retail stores as Apple does not have the license to sell products directly.

Prior to the partnership, Flipkart relied on third-party retailers for selling Apple products via its marketplace. This enabled (and sometimes forced) Flipkart to give heavy discounts on iPhones and other Apple products to match the offering by rivals Amazon India and Paytm among others in gaining GMV, or gross merchandise value.

“Partnering with Flipkart means Apple will have a better control on pricing unlike what happened last year when pricing for Apple products across leading ecommerce players was largely unstable. This might also be a good move for Flipkart from value perspective when whole focus has been shifted from GMV lately,” Tarun Pathak, Senior Telecom analyst with marketing research firm Counterpoint Research told Mashable India.

Though Flipkart might lose on those customers who are looking to purchase an iPhone at discounted prices, the company will get two things that its rivals wont better supply chain and marketing support from Apple. The iPhone 7 and iPhone 7 Plus will launch in India on Oct. 7, and they are likely to be in short supply during the first few weeks.

Apple also has a partnership with Infibeam, another ecommerce company in India to directly sell iPhones. Its new tie-up with Flipkart however includes plans to sell products such as iPads and Mac lineup as well. Flipkart is the biggest player in online smartphone sales. It sold roughly half of all the smartphones sold online in India last year, according to Counterpoint Research.

Apple was on the receiving end of the ecommerce price war in India.

For a company that is known for its high priced products, Apple was on the receiving end of the ecommerce price war in India. Last year, Amazon India, Paytm, Flipkart and Snapdeal offered the iPhones with enticing discounts. As a result, the iPhone 6s base model, which was officially priced at Rs 63,000 ($945), was selling on e-commerce sites for as low as Rs 45,000 ($675) days after its availability.

Ecommerce sites are steadily becoming a major platform for smartphone sales. For instance, sales through online shopping portals amounted for 32 percent of the overall smartphone sales by volume in Q2 2016, according to Counterpoint Research.

Apples partnership with Flipkart comes weeks ahead of the iPhone 7 and iPhone 7 Plus launch in India, which is scheduled for Oct. 7. The iPhone 7 starts at Rs 60,000 ($900), whereas the base iPhone 7 Plus model is priced at Rs 72,000 ($1,080). The company has also revised prices of its last years iPhones, with the iPhone 6s now starting at Rs 50,000 ($750).

Originally found athttp://mashable.com/