Apple banned 22 ‘competing brands’ from around a new retail store
Ahead of the opening of the first Apple Stores in India, it’s being reported that Apple banned 22 competing brands from an “exclusive zone” around the store. These brands include Amazon, Facebook, Google, and Twitter.
The iPhone maker used a clause in the mall lease agreement to ban these brands not just from opening stores in the zone, but even from buying ad space there…
First Apple Stores in India
It’s been a long, hard slog for Apple to be able to open its own retail stores in India.
In a bid to boost the manufacturing sector in the country, the Indian government banned anyone from opening single-brand stores unless a high percentage of the products sold within it were made in India.
Apple has been involved in tough negotiations with the government for many years on this issue, but it’s only after it significantly increased iPhone assembly within India that it was finally granted the necessary permits.
The first store, Apple BKC in Mumbai, is set to open on April 18. This will be followed almost immediately by Apple Saket in Delhi. Plans for the Mumbai store leaked some time ago, but the company managed to keep the lid on the Delhi one.
Apple banned 22 ‘competing brands’
India’s Economic Times reports on the exclusion zone for the Mumbai store.
According to the lease agreement accessed by data analytic firm CRE Matrix, the company has specified 22 brands including Amazon, Facebook, Google, LG, Microsoft, Sony and Twitter that should be kept out of its “exclusive zone”. This will include stores, hoardings and advertisements […]
“The licensor will not give on license, sub-license, lease, sub-lease or any other arrangement nor allot any of the brands listed as ‘Competing Brands’ to occupy any space for setting up of retail stores for retailing, advertising, selling , offering, displaying and merchandising their products and services within the area of the shopping center depicted on the exclusivity zone,” as per the agreement.
Many of the brands make Windows laptops, which compete with Apple’s MacBooks. The company also seemingly doesn’t want any nearby competition for HomePod or Beats audio products, as Bose and Devialet (of $2K Bluetooth speaker fame) are also on the list.
In a bid to limit competition for HomeKit products, Nest is also excluded. Garmin is there as a smartwatch competitor, especially for the Apple Watch Ultra.
Somewhat bizarrely, one of the brands banned by the agreement is Apple’s primary iPhone assembler, Foxconn. Twitter is also an odd one, although here Apple may simply view the unpredictable behavior of the company as risky from a PR point of view.
Interestingly, the report names 21 of the 22 brands, leaving the final one a mystery. I would, however, wager a large sum of money that the missing one is Samsung.
The report says that it’s not unusual for “anchor stores” – big brands likely to drive customers to a shopping mall – to insist on excluding direct competitors, but a retail consultant says that such a long list across multiple sectors is not at all common.
The sheer amount of time and effort it has taken to finally be allowed to open its first retail stores in the country may be one factor in Apple’s stance. Having finally achieved its goal, it probably wants to maximize the return on its investment.
The report says it’s likely that Apple negotiated an identical or similar clause for the Delhi store.
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