Apple up its local retail game

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Two American firms – Apple and Massmart – are teaming-up to conquer the smart device market in South Africa, which is presently dominated by three top brands: Nokia, Samsung and Blackberry. By Gugu Lourie


Although Nokia and BlackBerry’s share of the global mobile market is diminishing, these brands remain popular in South Africa.

This was also confirmed in the Mobile Africa 2015 study conducted recently by GeoPoll and World Wide Worx, which surveyed 3 500 mobile phone users in five of Africa’s major markets, namely South Africa, Nigeria, Kenya, Ghana and Uganda. According to the study, 36% of participants in South Africa preferred Nokia, 21% preferred Samsung and 14% Blackberry. While 6% of all 3 500 participants indicated they had a BclacBerry, 17% indicated their next phone would be a BlackBerry. This is in stark contrast to its global figures; global research firm IDC estimates that BlackBerry controls 0.3% of the global smartphone market.

The Mobile Africa study confirmed a widely held view that Nokia remains the single biggest phone brand in the major African

The Apple Store, Amsterdam
The Apple Store, Amsterdam

markets. However, its market share is plummeting fast and expected, according to the study. It also found that the old Blackberries have entered the mass market, and are still regarded as a status symbol in much of Africa.

Meanwhile China’s smartphone giant Xiaomi is also planning to enter the South African market.

Apple seems to be preparing itself for an onslaught from Xiaomi in South Africa, a market in which its iPhone enjoys a share of 5%.

An alluring alliance

It is against this background that JSE-listed retailer Massmart, which is owned by US retail conglomerate Wal-Mart Stores, quietly teamed up with US technology giant Apple.

Massmart CEO Guy Hawyard inform investors via the JSE that they were “excited that nine stores (DionWired) have been selected recently to become Apple White Stores.”

Massmart, which imports most of its electronic products, didn’t provide further information on DionWired stores and the deal with Apple.

DionWired stores provide a wide range of discerning brands such as Apple, Smeg, Marantz, Bose and Onkyo to the South African higher-income consumer.

Apple is partnering with Massmart in order to target high-end customers frequenting DionWired. It also wants to make its brand more prominent ahead of its rivals such as Samsung, Huawei and Sony.

Massmart said the first DionWired outlets to receive the White Store makeover would include Gateway in Durban, Canal Walk and Somerset stores in the Western Cape.

“The stores will be designed by Apple US to give you the Apple experience, even the store fixtures will be set up by a

The Apple Store, Zorlu Center, Istanbul
The Apple Store, Zorlu Center, Istanbul

specialist team,” DionWired director, Nazim Cassim, said.

 

“The whole store will not be branded Apple, but will have a dedicated Apple area, which will be branded in accordance with Apple corporate identity. To date we have approved nine stores for the roll-out.”

For Massmart, this partnership represents a possible opportunity to further diversify its revenue streams or bulk up DionWired sales for smart devices; for Apple the partnership could be a strategy to position itself in a high-end retail space and prepare for a competition from Xiaomi.

The official myistore.co.za website currently lists 20 Apple iStores in South Africa. Between 2007 and 2014, Apple grew its number of stores worldwide from 197 to 437.

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