Apple's Chinese retail growth stalled by fraud & competition, forcing repositioning

Posted:
in General Discussion
Apple's retail expansion in China is reportedly being stymied by a number of factors, putting it well short of ambitious goals the company had earlier this decade.

An Apple store in Beijing.
An Apple store in Beijing.


The company originally envisioned having 25 stores in the country by the end of 2011, but ultimately managed just 26 stores by the end of 2016, The Information noted on Monday. There are now 42 shops in mainland China, and 50 in the "greater China" region, including the likes of Hong Kong and Macau.

Apple is said to be "repositioning" its stores to target city locals and tourists from smaller Chinese locations, instead of trying to build a nationwide chain. The company has cancelled plans for a store in the city of Changsha, and has yet to move ahead with plans for a Harbin location.

One of the factors hurting Apple is said to be the rise of local smartphone brands like Oppo, Xiaomi, and Huawei. While previously known for budget phones, those firms have increasingly delved into the high-end market while maintaining cheaper prices than iPhones.

The company is also said to be encountering bureaucratic obstacles, bribery by government officials, and widescale fraud. In one instance, a pair of busses with about 80 students arrived at an Apple store in Beijing in order to exploit the company's annual back-to-school promotion, in which it offers free Beats headphones when buying a Mac or iPad. The students were each paid about $10.

Similar fraud schemes hit Apple stores across the country each year, according to retail workers contacted by The Information.

Other forms of fraud include iPhone repair schemes, in which parts are stolen from working iPhones and replaced with fake ones in order to claim free replacement iPhones for resale. The legitimate parts are used to refurbish hardware.

The iPhone repair fraud alone may be costing Apple billions of dollars, which could make adding locations more of a hassle than they're worth.

Comments

  • Reply 1 of 13
    Although the overall Chinese market for iPhones is potentially as large as American or European markets, size is not the key factor in marketing. The marketing relationship between Apple and its Chinese customers cannot be managed in the same way as it is here. In addition to patent laws that aren’t enforced by Chinese authorities, relatively poor workers may earn far more in a day systematically gouging Apple than they can in regular jobs paying only $2-$3 per hour. Apple is frequently harassed in China for discriminating against Chinese “consumers” when the company cracks down on these professional scams. Longer term, Apple should make arrangements to shift iPhone assembly to robots in factories outside of China. Any tangible asset in that nation is a potential hostage to Beijing’s policies, which have been optimized to control others and plunder their wealth.
    edited October 2018 magman1979racerhomie3viclauyycwatto_cobrajony0
  • Reply 2 of 13
    wood1208wood1208 Posts: 1,759member
    Apple or any company selling anything in China,India,other similar countries must separate their marketing,sales/support,warranty from USA,European,etc.countries. Scammers in these countries come up with all kind of scams and often employees are also involved in facilitating scams. In those countries, once you buy and cross the door of the shop, the purchase is yours irrespective of you found it defective afterwards.
    edited October 2018 radarthekat
  • Reply 3 of 13
    tzeshantzeshan Posts: 1,855member
    Although the overall Chinese market for iPhones is potentially as large as American or European markets, size is not the key factor in marketing. The marketing relationship between Apple and its Chinese customers cannot be managed in the same way as it is here. In addition to patent laws that aren’t enforced by Chinese authorities, relatively poor workers may earn far more in a day systematically gouging Apple than they can in regular jobs paying only $2-$3 per hour. Apple is frequently harassed in China for discriminating against Chinese “consumers” when the company cracks down on these professional scams. Longer term, Apple should make arrangements to shift iPhone assembly to robots in factories outside of China. Any tangible asset in that nation is a potential hostage to Beijing’s policies, which have been optimized to control others and plunder their wealth.
    Your several points of view are biased or simply untrue. 
  • Reply 4 of 13
    Well. At least Apple is making  good money from China. Unlike Google & Facebook.
  • Reply 5 of 13
    Well. At least Apple is making  good money from China. Unlike Google & Facebook.
    But I believe it is contracting.
  • Reply 6 of 13
    Siri's not very good at understanding English, let alone Chinese one would think.

    What smartphone assistants do they use primarily on Chinese smartphones?
  • Reply 7 of 13
    tzeshantzeshan Posts: 1,855member
    saltyzip said:
    Siri's not very good at understanding English, let alone Chinese one would think.

    What smartphone assistants do they use primarily on Chinese smartphones?
    Siri can understand Chinese very well. 
    watto_cobra
  • Reply 8 of 13
    chasmchasm Posts: 1,083member
    Siri understands English very well. It can’t answer every possible question, but it’s rarely had any difficulty understanding what I was saying.

    Maybe it’s your diction.
    watto_cobra
  • Reply 9 of 13
    I don’t get the part where “80 students paid $10 each for something (a Mac or iPad?) in order to get a free Beat headset” thingie? Can you (admin) please point me to the original story? Thanks. 
    edited October 2018
  • Reply 10 of 13
    tzeshan said:
    Although the overall Chinese market for iPhones is potentially as large as American or European markets, size is not the key factor in marketing. The marketing relationship between Apple and its Chinese customers cannot be managed in the same way as it is here. In addition to patent laws that aren’t enforced by Chinese authorities, relatively poor workers may earn far more in a day systematically gouging Apple than they can in regular jobs paying only $2-$3 per hour. Apple is frequently harassed in China for discriminating against Chinese “consumers” when the company cracks down on these professional scams. Longer term, Apple should make arrangements to shift iPhone assembly to robots in factories outside of China. Any tangible asset in that nation is a potential hostage to Beijing’s policies, which have been optimized to control others and plunder their wealth.
    Your several points of view are biased or simply untrue. 
    I am Chinese. I think his point is very accurate. These is a saying in China said, everything is fake, only scammer is real. 

    watto_cobra
  • Reply 11 of 13
    I don’t know the story. But I assume someone just hire bus load of student to buy the Mac at student price and get the a free beat headphone for resale.

    I don’t get the part where “80 students paid $10 each for something (a Mac or iPad?) in order to get a free Beat headset” thingie? Can you (admin) please point me to the original story? Thanks. 
    ravnorodomwatto_cobra
  • Reply 12 of 13
    ivanhivanh Posts: 267member
    tzeshan said:
    Although the overall Chinese market for iPhones is potentially as large as American or European markets, size is not the key factor in marketing. The marketing relationship between Apple and its Chinese customers cannot be managed in the same way as it is here. In addition to patent laws that aren’t enforced by Chinese authorities, relatively poor workers may earn far more in a day systematically gouging Apple than they can in regular jobs paying only $2-$3 per hour. Apple is frequently harassed in China for discriminating against Chinese “consumers” when the company cracks down on these professional scams. Longer term, Apple should make arrangements to shift iPhone assembly to robots in factories outside of China. Any tangible asset in that nation is a potential hostage to Beijing’s policies, which have been optimized to control others and plunder their wealth.
    Your several points of view are biased or simply untrue. 
    Which points of view are biased? Which points of view are simply untrue?  Please be specific, and give verifiable details. 🙏
  • Reply 13 of 13
    ivanhivanh Posts: 267member
    tzeshan said:
    saltyzip said:
    Siri's not very good at understanding English, let alone Chinese one would think.

    What smartphone assistants do they use primarily on Chinese smartphones?
    Siri can understand Chinese very well. 
    Which Chinese? Which accent? Which regions of phases and meanings are referred?
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