Apple Inc is leading the corporate brands across sectors in coming to the aid of the retailers at this time of the COVID-19 lockdown. Retailers have had to bear the burden since their fixed costs have to be incurred like rent and salaries with zero revenue. Apple has gone ahead and transferred to its 500-odd exclusive stores in India the amounts needed by them to pay the rents and salaries for their staff for two months. Apart from this, the company has offered them an additional credit period of 60 days on supplies from the company, as per a report in the Economic Times.
This could come as a huge relief to the Apple retail stores. The actual lockdown may last only 40 days assuming the government does not extend it beyond May 3. There is still a question mark if the malls will be opened so soon. These are seen as places where people gather in large numbers and it is difficult to implement social distancing.
Apple is not the only company to come forward to protect their trading partners whether it is distributors or retailers. Hindustan Unilever, ITC, Marico and Godrej in the FMCG sector and Samsung are also finding ways to help their distributors tide over the difficult period. Liquidity is the major issue for most of them since they have seen much lower sales this month.
Apple has called it financial support and the company has reportedly advised its retail partners to explore ways of selling the products if the stores are not being allowed to be opened.
HUL, says it is not only taking care of its distributors but is protecting its vendors also by releasing their pending payments. These suppliers are mostly MSMEs who have been badly hit.
Samsung is also working on similar extended credit period strategies. The payment was to be made between 15 to 25 days which is now being extended by an additional 5 to 15 days. Some of the FMCG companies have also come forward to bear the salaries and allowances of the distributor salesmen.
The trade body representing the mobile retailers, All India Mobile Retailers Association itself has appealed to all the smartphone brands to extend a 30-day credit line to all retailers and an additional 2% margin on the products. They say in their assessment, the sector may take up to 6 months to recover from the reverses they have had to face now.