Apple has stipulated that about two dozen technology, electronics and ecommerce brands shouldn’t have any kind of presence near its soon-to-be-inaugurated store at Reliance Jio World Drive mall in Mumbai.
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. This will be Apple’s first owned store in India. “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 centre depicted on exclusivity zone,” as per the agreement.
Other brands in list
Other brands cited are Bose, Dell, Devialet, Foxconn, Garmin, Hitachi, HP, HTC, IBM, Intel, Lenovo, Nest, Panasonic and Toshiba.
Apple has signed a lease for over 11 years with a 15% rent escalation provision every three years with the Mumbai mall. The company will pay around Rs 42 lakh per month for about 20,800 sq ft of space as a minimum guarantee, in addition to 2% of revenue share for 36 months, and 2.5% after that.
Apple and Reliance Jio World Drive mall didn’t respond to queries.
Exclusion zones are routinely included in lease agreements with big stores.
“Anchor stores can understandably ask for certain exclusions with competing brands, which landlords usually agree to provide, whether as an informal understanding or as part of the documented agreement, but it is unusual to have a long list of companies that may not be direct competitors across the entire product range,” said Devangshu Dutta, founder of retail consulting firm Third Eyesight.
American toy and clothing retailer Toys ‘R’ Us had to shut its store in Hyderabad last month within 24 hours of opening as the mall had a no-compete clause with another toy brand. The move brought into focus such clauses and some malls are said to be considering a review of the practice to allow other brands of similar categories in their malls.
Apple recently unveiled the facade of its Mumbai store at Jio World Drive Mall that’s likely to open later this month. The launch may be attended by Apple CEO Tim Cook.
The second store in Delhi’s Select Citywalk mall may also open later this month after the Mumbai launch, according to industry executives aware of the matter. The store is said to be ready. A similar exclusive zone will likely have been put in place for the Delhi store, experts said.
India has consistently been one of the best-performing markets for Apple for more than six years. In the quarter to December 2022, the company achieved record overall sales in the country.
Apple sold about 6.7 million iPhones in India in 2022, up from 4.8 million in 2021 and 2.7 million in 2020, as per IDC data.