According to the information website The information, Apple's expansion of its retail plans in China has been hampered by a number of factors, forcing them to prepare for a transformation in the Chinese market.
Apple's plan for 2011 was to operate 25 stores in China before the end of the year, but the expansion rate did not reach its target. At the end of 2016, Apple had only 26 stores in China. According to Apple's official website, Apple currently has 42 stores in mainland China, including 50 stores in Hong Kong and Macau.
In July 2008, Apple opened the first direct Apple Store in mainland China in Sanlitun, Beijing before the opening of the Beijing Olympics. Subsequently, it gradually expanded from first-tier cities such as Beijing, Shanghai, and Guangzhou to second-tier or provincial capital cities such as Nanjing, Wuxi, and Kunming. The most recent store opened on September 21st in the Suzhou Industrial Park.
According to Apple Storefronts tracking, in 2015 and 2016, Apple actively expanded its retail business in China, adding 30 new stores. However, since the beginning of 2017, Apple has opened only five new stores in China.
According to information from 11 Apple store clerk, Apple will re-locate direct stores in mainland China. Turning to serve local residents of the city and tourists from second- and third-tier cities in China, instead of trying to build a large number of chain stores nationwide.
One of the reasons that affected Apple's decision was that local smartphone brands such as OPPO, Xiaomi and Huawei began to move toward the high-end market. The flagship models of these brands are cheaper than the iPhone, trying to acquire more users in the first-tier cities.
In response to the transformation, Apple recently canceled the Apple Direct Store program in Wharf, Changsha, and postponed the opening of a direct store in Harbin.
In addition to competitors' problems, with the increase in the number of direct stores, The information said that Apple also faces bureaucratic obstacles, bribery of government officials and mass fraud.
Especially in the case of large-scale fraud, the problems encountered by direct stores are more serious. Direct retail clerk said that there has been a large-scale exchange of Beat headphones for student discounts. He described that about 80 students took the bus to an Apple store in Beijing, using Apple to buy a Mac or iPad every fall, and get a free back-to-school promotion for Beats headphones. In exchange for a large number of Beats headphones worth thousands of dollars, and these students can get 60 yuan per person.
The employee said similar frauds occur every year in Apple-owned stores across the country.
Previously, The information also reported that the Shenzhen Apple retail store was scammed by fake teams to repair and replace new machines with fake parts, resulting in Apple losing up to $2.1 billion in maintenance costs.
The Apple Store took a very loose approach to repairing mobile phones before 2013. As long as the machine has a failure caused by non-human damage, it will be replaced directly without a check. Criminal gangs buy and steal iPhones, remove high-value components such as CPUs and displays, and stuff them with fake parts or even chewing gum wrappers. Then went to the Apple Store to claim that the phone was broken, asked the clerk to replace the parts according to the warranty period, then sold the stolen parts and brought them to the second and third tier cities to assemble them into refurbished mobile phones for sale.
During the period when the fraud incident reached its peak, Apple found that 60% of the iPhone repair requests were fraudulent in the Chinese mainland and Hong Kong markets.
At the same time, the government's complicated formalities and bureaucracy also caused the slowdown of Apple's expansion. Another employee of the Apple Direct Store said that “Apple had to start the cumbersome government formalities approval work very early, including construction and fire protection. And customs declaration of imported materials and other procedures. At the same time, the regulatory framework of local governments in China is much more complicated than the United States and more opaque. This increases the cost of opening a store. ”
Other employees also reflected that low-level government officials asked Apple's direct stores for free iPhones and Beijing and Shanghai to negotiate on tax issues.
In the last quarter, Apple's Greater China region (including Taiwan, Hong Kong and Macau) had revenues of $9.5 billion. Greater China accounted for 17.9% of Apple's revenue for the quarter, making it the company's third largest market after the US and Europe.
Source of the map: Curiosity Daily News