Apple Brand is Now Chinese to the Core

Posted by Abe Sauer on April 30, 2012 11:01 AM

"If you don't have one, you're a loser."

So reads the English-language copy at the bottom of a poster in the window of an Apple "authorized reseller" on Hongmei Road in Shanghai. To Americans, it's another funny bit of long-in-translation Chinglish. But, increasingly, it's a bit of dead serious marketplace analysis in China. When the brand's history is written, the week that it announced sales numbers in China that Apple's CEO called "mind-boggling" may be remembered as the moment Apple's future moved from the West to the East. 

Indeed, a Bloomberg report found that everyone in China from "teachers to furniture makers" were snapping up iPhones because, as a Beijing teacher put it, "A lot of people in my office use it and said I should get one, so I did." But it's beyond the gainfully employed. Even low-earning migrant workers in Shanghai want an iPhone, and demand it by brand name.

In a (legitimate) massage shop not far from the Hongmei Apple "authorized reseller" where an hour-long foot massage can be had for 46 yuan (about $7.60), a masseuse quizzes me about my iPhone. He says he would love to have one. He arrived in Shanghai three years ago from Shaolin (the city famous for kung fu), and has no plans to go back because, he says, "The jobs pay nothing and are all hard."

Rubbing tired Shanghaiese (and in my case, American) feet, the masseuse makes much more in the city, about 5 yuan ($0.83) an hour. With an iPhone starting around 4,000 yuan (approx. $640), he would need to rub feet for about five years. But while the Mercedes, Audis, Porsches and BMWs that clog the roads are out of his reach, he tells me an iPhone is a real possibility for him someday, if he works hard and saves. In the meantime, he can pay for China's "sent from my iPhone" hack.

The masseuse's sacrifice for Apple pales compared to other recent tales. Stories of young women selling their virginity in exchange for iPhones have circulated, some more believable than others. And in southern China, five men were recently charged for paying a teen 22,000 yuan ($3,600) to remove a kidney. The boy planned to use the money to buy an iPad and an iPhone. 

China's Apple craze has also fueled a huge business in smuggling. In a story so old by now that it's hardly eyebrow raising, a 12-year-old Hong Kong girl was recently caught crossing into China with 30 iPhones strapped to her body. (Though, the empty beer bottle smuggling gambit appears to be a fresh take.) 

It's a nation saturated with Apple logos. A walk down nearly any street in Shanghai turns up at least one or two "authorized resellers." The corner of Tianshan Road and Furongjuang Road is just such a sight. There, a mall of tech stores is dominated by Apple "authorized resellers" and makeshift stores offering . Street vendors offer piles of knockoff iPhone 4 and 4S cases. Any store that carries any kind of tech product often throws an Apple logo sticker on the window, because, why not? 

In a bit that echoes last year's "fake Apple store" scandal, an expat in Nanchang recently walked a local street and found one "Apple Store" after another: 

And yet, the official Apple Store in Shanghai's Xintiandi is mobbed daily. The topic of discussion? When will the new iPad be available here? No doubt its release is held up due to Apple's heated trademark spat with local company Proview. 

Not a topic of dissuasion? Foxconn. The manufacturing relationship that swamps media mentions of the brand in the US is largely absent in China. The greatest threat to Apple in Chins is not its Foxconn relationship, but its ability to maintain control of its apps stream.

With over 90 percent growth in China sales in the last quarter, the nation now accounts for a fifth of all of Apple's sales. That growth is predicted to double by the end of 2012, even as Apple's competitors hit back with new products. It's a future that takes into account the upward mobility of Chinese workers like my Shanghai masseuse and makes, as Goldman Sachs' Jim O'Neill argues, "a bet on Apple a bet on China." 

Comments

sweet People's Republic of China says:

The IPhone economic worth far more than the brand value

May 3, 2012 01:26 AM #

Kristian Amor United States says:

Good share! I hope more people will discover your blog because you really know what you're talking about. Can't wait to read more from you

May 3, 2012 04:16 AM #

Comments are closed

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