Apple is set to open a new distribution center in India to consolidate its supply chain and logistics in the country, according to The Economic Times. The distribution center will be Apple’s first in the country. This move comes as the tech giant works to establish a retail presence in India.
Distribution center to help Apple greatly
Apple, which has faced challenges in India due to local regulations, currently brings products to India via many different cities, including Chandigarh, Bengaluru, Chennai, Hyderabad, New Delhi and Mumbai. Each city has a different value-added tax (VAT) rate, which causes a difference in prices when the devices are shipped directly to distributors from the airport, notes MacRumors. Online retailers in India source their inventory from low-VAT territories so that they can get a price benefit over brick-and-mortar retailers.
DB Schenker, Apple’s global logistics partner, will own and operate the distribution center, which will be near Mumbai in the city of Bhiwandi. The center will enable the U.S. firm to stock its products adequately, streamline its supply chains and logistics and ease operations, an unnamed executive told ET. The center will help the tech giant maintain consistent pricing for its products as well.
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Apple will also be hoping that this distribution center will let it put a stronger hold on the enterprise Mac market by increasing tailored options for enterprise customers.
Betting big on India
Cook and Apple have placed large bets on India to help battle the slowing growth of the iPhone. The U.S. firm has been increasing its efforts to get a larger and much better foothold in the country. The tech giant has been working hard to set up retail stores in India by gaining regulatory approval. If the recent reports are to be believed, then it is getting successful as well.
A few months ago, the Indian government adopted rules to make it easier for the U.S. firm to open retail stores in the country. Further, the tech giant is opening a campus focused on Maps development and an iOS app design and development accelerator in Hyderabad and Bengaluru, respectively. The U.S. firm has also asked for financial incentives to make it easier to set up a manufacturing plant in the country.
On Thursday, Apple shares closed down 0.93% at $109.49. Year to date, the stock is up more than 4%, while in the last six months, it is up more than 11%.