Hong Kong Apple Store: Everything You Need to Know.

October 1, 2011 | by:    | Apple CHINA TECH |

Apple-Store-HongKong
From the realm of sci-fi to Steve Jobs’ glass staircase: The Hong Kong Apple Store is official. Where is it? What does it look like? How will the store affect the city’s “gray market” for Apple products?

Here’s everything you need to know about Apple’s newest Apple Store in Asia, all in one place. And trot past the break for a video of the Apple store grand opening.

So let’s start with the basics. The store appears to be a normal Apple store right? Nothing could be further from the truth.

First the Apple store in Hong Kong is very special. It is a flagship, but it isn’t just that simple. It is also the most expensive Apple store, and it is being compared to other high profile stores in Paris, London, and New York’s Fifth Avenue. The store has 15,000 sq ft of space, and covering two levels of the IFC mall. What’s IFC mall? It is a 4.7 million square-foot complex, and contains 200 stores, comprising a unique combination of high-end shopping and entertainment outlets, prestigious offices and Hong Kong’s finest hotel and suite hotel. The Hong Kong Apple store aims to accept 40,000-plus visitors a day, four times the average of US stores.

The flagship Hong Kong Apple Store at IFC Mall

Hong Kong is well-known as the Asian shopping paradise providing an array of luxurious shops and malls, the city turns out to be one of the leading travel destinations in Asia for mainland tourists. Up to 80 percent of mainland tourists come all the way from their hometowns to Hong Kong to purchase quality products, and these mainlanders always plan to spend HK$12,000 (about $1540) on average during their stay in Hong Kong, with more than half of the money allocated on shopping for luxury clothing and electronic products. So, in order to attract mainland tourists from the Guangdong province, Apple decided to open their first Hong Kong store in Central, and the company has negotiated a 10-year lease for the retail space, spending $20 million-plus for construction and up to $9.4 million a year for rent.

The gigantic glass display spans three 6 lanes of traffic

The lower level is enclosed with one entrance on the mall side and glass windows to outside. The upper level is all glass on the mall side, glass windows to outside. It is connected to mall hallway via glass bridge and the two levels are connected via spiral glass staircase.

The store covers two levels of the IFC mall

Next, you have the spiral staircase. It is made of frosted glass this time. Before it was not. Why is this important? Well at the other stores, and especially at the Pudong store, there was a major problem with people standing under the glass stairs and staring up at people. It was so bad, that at the Pudong store Apple put a security guard by the stairs so people could not do that any longer.

The iconic glass staircase in Hong Kong Apple store

Also, the Genius bar which is on the second floor, is now in the centre of the room as opposed to the back. This is because Apple gets four times the traffic of the American stores, in China. It has been noticed that at Sanlitun it takes almost two hours to see a genius. Apple’s benchmark NPS (Net Promoter Score) which measures how satisfied customers are is noticeably down at all the Chinese stores due to the wait times. Hopefully this can rectify it.

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The Genius Bar is in the centre of the room
Apple is supposed to have a 24 hour turn around time with this store, it will be interesting to see if they can reach this goal with customer’s repairs, as every other store in China is woefully behind in that regard.

Another thing that differentiates this store from the mainland Apple ones, is that they do not have the fake money detectors. As counterfeit money is not as big a problem in Hong Kong as the mainland, perhaps that is why. The automatic money counters and drawers hidden on the tables are present however. Instant payment with credit cards and debit are also enables through the express zone. This enables customers to get in and out quickly.

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The express zone with lots of iPads and iPhones
Of note, Apple is focusing on it’s highly successful one to one, by making a large portion of the store centric to that service. For readers who are not familiar, one to one is setting up your iOS or Mac device prior to it getting taken home, with data transfer from your old Mac or PC. Also it has training sessions with the Family Room Specialists or Creatives for one year as an added bonus.

This store is unique in other ways. Another example is the unusually high proportion of girls to boys. In the US is usually around 3-5% for the total amount of girls in the store in any given role. However in the IFC store, almost 30% of the workers are girls. Also, 80% of the employees are from Hong Kong, where 20% are from other countries. As a minimum, in order to make the transfer they must speak excellent Cantonese as well as English. The reason for such a high proportion is so that the experienced employees can mentor the new ones, and help the new employees with their experience.

Please note that as per other stores this size, almost 300 employees have been hired. One interesting thing is that at least one of the managers is from Motorola, and as per Apple practice one is from the GAP also. They like the GAP because the policies that company uses of mimics their own. It is a company where Apple gets many of it’s managers from.

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The Apple employees were very excited during the grand opening of the store
One interesting thing is that we don’t see any Mac Pros, Mac minis, and Thunderbolt displays in the store.. While these are not the most profitable products, they fill a very important gap in what is needed by many Mac enthusiasts. These products also were not on display during the media preview of the store. Fortunately, customers can still get these products from the store when they decide to purchase it. Oh, the Hong Kong Apple store is not the 100th overseas store however.

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Customers purchasing Mac mini and Thunderbolt display
Apple pushed hard with both the Nanjing East Road store and the IFC store to make it before the “Golden Week”. For readers not familiar, Golden Week is a holiday in the People’s Republic of China that celebrates National Day and starts on Oct 1st. Three days of paid holiday are given, and the surrounding weekends are re-arranged so that workers in Chinese companies always have seven continuous days of holiday. So, the seven continuous days of holiday is very important for Apple’s retail business in China and Hong Kong. For those Chinese who are living in Northern China, they will visit the Apple stores in Beijing and Shanghai. And for those living in Southern China, they will prefer to visit Hong Kong, especially the mainlanders from Guangdong province.

Why? First, you must know that it is not convenient for the citizens from Guangdong province to travel to Beijing and Shanghai, airplanes are absolutely needed for the travel. If you were in a car and maintained an average speed of 60mph (96 kmh) over the course of your journey, it would take you around 20 hours to get from Guangdong to Beijing, and 13 hours to Shanghai. If the Guangdong citizens visit Hong Kong, it will only take them 2 hours for the journey by bus.

Secondly, it is cheaper to buy Apple products in Hong Kong, concerning the exchange rate. Apple knows that people in Mainland China come to Hong Kong to do shopping because of the lower taxes, and literally millions of RMB and HKD will be spent during this week. As the Renminbi gradually rises in value against the US dollar, the Hong Kong dollar, which is pegged to its American namesake, will inevitably decrease in value against the Yuan, enabling Chinese mainland people to buy more goods in Hong Kong for the same amount of money. For example, Apple’s MacBook Air starts from HK$ 7,588 in Hong Kong, however, the product costs more in China where it starts from RMB 7,998. So, we can tell you that the Hong Kong Apple store will be a paradise for Guangdong Apple fans during the Golden Week.

Also, 5000 shirts were given out to the people who showed up on the first day.The shirt looks exactly like the sign that was over the glass before launch. We at M.I.C. like the Nanjing road one much better.

Interestingly, there is a Nokia store by the Apple store about three hundred steps away.
Nokia Store
The Nokia store is located at the 1st level of the IFC mall
The Apple reseller, DG Lifestyle, that we detailed in our previous story, vanished form IFC mall about two weeks before the grand opening of the Apple store. An odd coincidence.

DG Lifestyle is one of the most favorite Apple resellers in Hong Kong
We noticed at the store launch that the way Apple prepares its stores for launch is quite different from other companies. We also firmly believe that this is where their success lies. We had Apple employees delivering water to us waiting in line, we had Apple films crews with professional and expensive video equipment filming the event. It was quite a sight to behold.

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Apple employees delivering water to people waiting in line for the grand opening


Apple Store vs. The Gray Market

We truly believe the new Hong Kong store will put a big dent in the city’s “gray market” for Apple products, which is thriving because there is not enough supply to satisfy the huge demand for iPads and iPhones. Alongside official resellers, a parallel market has sprung up with shops selling iPads and iPhones originally bought in other countries such as the United States, UK, Japan, and brought in by couriers to be resold at hefty premiums. We know Apple is not happy with the gray market, since the vendors are always selling the iPhones and iPads for a higher price when Apple’s authorized resellers have no iPhones and iPads in stock. Some local customers will spend more money to purchase the iPhones and iPads from the gray market if both the authorized reseller and Apple’s Hong Kong online store have no stock. Today, there’s an official Apple store available in the city, local customers and scalpers from Guangdong province can visit the store to purchase the Apple products, with no mark-ups at all. So, Apple could prevent the grey market to earn more profits than them. However, we are afraid the Hong Kong Apple store might meet aggressive scalpers just like what we see in the Beijing Apple store.

The Beijing Apple Store’s glass door got smashed by Chinese iPhone scalpers
We have also seen evil scalpers reselling iPhones and iPads outside the China Apple Stores, so what would happen when the iPhone 5 is available for sale in the Hong Kong Apple store? Well, we hope Apple has learnt the lesson of scuffle at Beijing Apple store. Please do not offer contract-free iPhones.

Wrap-up

Apple has spent a lot of efforts and money to invest in this place. We are glad to see that thousands of Apple fans pouring in on the first day. It had the atmosphere of a party, which is exactly what it seems Apple wants. Shouting of “Apple store IFC!” followed by a countdown. It was very exciting. We really look forward to the iPhone 5 launch day and we cannot wait until the next store opening in Hysan place!





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