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Five in five for Apple

Tech giant Apple is set to open five new stores in five weeks in mainland China.

That’s equivalent to one third of its existing 15-strong company owned store network in the mainland.

The Chinese government’s news agency Xinhua quoted Apple’s retail head Angela Ahrendts after a telephone interview.

“We are opening five new stores before the Chinese New Year this year,” she said. “Four of the stores are in brand new cities for us.”

China is now Apple’s single biggest market despite its store network there still being in its infancy. Its first store there opened in 2008.

Apple, as a brand, is extremely popular in China as a status symbol and as the incomes of middle class Chinese grow more and more people can afford its products.

However Apple faces intense competition from local players, especially newcomer Xiaomi, which offers a smartphone with similar features to the iPhone 6 but at a third the price. By expanding its flagship store network, Apple hopes to maintain the aspirational qualities of the brand and thus justify its higher prices.

Despite its pricing, Apple is facing challenges meeting demand in China, where the majority of its products are manufactured, especially of the iPhone. Restrictions on supply have seen people cross the border into Hong Kong to pay a premium for new phones bought locally and resold with a margin.

Last October, Apple CEO Tim Cook said Apple planned 25 new stores in the next two years, with a target of 40 stores. It has over 440 worldwide at present. But the current development program seems to indicate an even faster course ahead.

The newest stores are in Zhengzhou, which has just opened, and in Hangzhou, near Shanghai, which will open this week.

 

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