Apple vs. Chinese Scalpers: Test Your Luck! Maybe We’ll Let You Buy The New iPad (video)

By Chris Chang, posted Mar 15, 2012 at 5:20 PM, 2,726 views,

Apple vs. Chinese Scalpers: Test Your Luck! Maybe We’ll Let You Buy The New iPad (video)

The new iPad is expected to hit shelves of stores in Hong Kong on March 16. As China is not among the first countries on the schedule, Chinese scalpers are gearing up to make a fortune from mark-ups on new iPads bought from Hong Kong and brought to China. However, things are a little different at the Apple Store in Hong Kong. While we might expect to see long lines, Apple is warning customers not to bother lining up for launch of the new iPad at its retail store in Hong Kong. Here’s the deal: If you want to buy the new iPad in Hong Kong, you might have to enter a lottery to win the chance to buy it. Scalpers are pissed.

Following on from the violence-laden product launch that was the iPhone 4S, Apple is reportedly set to avoid such situations by offering its brand-new iPad to customers in Hong Kong by way of a lottery-based reservation system. It was brought in seemingly in a bid to prevent so-called scalpers coming from mainland China, where the iPhones and iPads are in short supply, buying up plenty of devices and then selling them on at a profit back in mainland China.

Signs are posted outside the Apple Store in Hong Kong specifically prohibit certain activities. In English, the signs say:

“No staying and queuing up here. Apple will not serve on a first come first serve basis for new ipad. Please refer to Apple’s official website for the detailed arrangement.”

The iReserve System

Apple has instituted the same Reserve and Pick Up system it used for the iPhone 4S, which means no walk-in purchases. This is bad news for scalpers who thought they could snap up the new iPad by hiring runners to line up for them at the Hong Kong Apple Store. Dubbed iReserve system, customers can go online and attempt to secure appointment. Customers must input their name, address and government ID number on the Apple web site to enter a kind of iPad lottery, whereby if the blue-shirts at Apple stores are smiling on them they will be sent an email telling them what time the following day they can collect their brand new iPad.

Only those who receive an email confirming their reservation and the time to pick up will be able to purchase the new iPad

For those people who don’t receive an email, they need to try again another time, and according to one Apple Store employee who was telling the scalpers to give up the idea of lining up, the Apple store will definitely not be selling the new iPad to walk-in customers.

Interestingly, in spite of the signs at the IFC Mall, and even police requests to leave, scalpers have still been trying to line up. Police have attempted to get the scalpers moving off the site, but has done so with little success.

Scalpers are reluctant to leave

A few police officers stood by with police dog

Chief police officer is on the spot, and he’s in-charge of the operation of controlling the scalpers

Apple store employees checking out the lines outside the store

An Apple representative talks with the scalpers

According to a scalper who does not wish to be named, the reason why so many scalpers are still lining up is that their gang leader has not given the order to “retreat”. The gang leader is the exact same person who was in charge of the operation of scalping for the iPhone 4S launch. What’s more, the line-waiters were paid HK$ 100 ($13) to wait in line for 24 hours, but comparing to iPhone 4S launch, scalpers were receiving HK$ 500 ($64) to wait in line for their bosses at that time.

over 30 line-waiters and scalpers are camping outside of the IFC

There’s another reason for these scalpers not going back home. Among the line-waiters and scalpers, there are some middle-aged women and men, and they do not know anything about the iReserve system at all. There are some housewives too, and they do know about the reserve and pick up system, but the problem is, they do not know how to surf the Internet. Here’s what a housewife said to the local media,

“How is it possible for us to surf the Internet? It’s unfair to us all,”

Scalpers Attack The Authorized Resellers

Surprisingly, more scalpers and line-waiters were seen lining up for the new iPad outside the authorized Apple resellers’ stores. Since the Apple retail store doesn’t offer walk-in purchases, people were turning to authorized Apple resellers and chain electronics suppliers. We’ve made a visit to the stores, and we saw swarms of iPad buyers stretching several city blocks long outside the reseller stores in the cities, with staff handing out tickets to customers who’d queued up early. Check out the gallery below to see the long queues!

Gallery: Lines Outside Authorized Reseller Stores

Inside The Grey Market

For grey-market vendors scalping Apple products can be a lucrative business, owing to the high markups some people are willing to pay. Kurt Lo, the ‘master of the Hong Kong grey market’ has already procured more than 30 new iPad orders before the official launch, and he currently plans to have at least 100 units of parallel imported new iPads in stock on March 16.

Just like last year, Lo has prepared couriers in overseas to hop on planes to Hong Kong after securing about 100-200 4G iPads. Here’s one thing to note: The 4G iPad is not available for sale in Hong Kong, so the 4G model will be priced at inflated prices in the grey market, and that’s what Lo is aiming for. With about 30 orders, Lo’s store has set six price points, ranging from HK$6,000 to HK$13,000 ($773 – $1,675) for the new iPad′s various versions, which differ in terms of storage capabilities and connectivity (4G LTE). While some customers are Hong Kong natives, most of the orders are placed from the mainland China and India.

A scalper sells his brand new iPads to a grey market vendor for easy money

When asked why Apple is offering the Reserve and Pick Up system for purchasing the new iPad, Lo truthfully responded, “Apple is clearly taking aim at the line-waiters and scalpers with the lottery-style system. With the system, it will be fair to real customers.”

Meanwhile, an Apple representative declined to comment on grey-market activity.

Shenzhen Customs Strengthens Its Crackdown on New iPad Smuggling

The new iPad is the target of Chinese smugglers wanting to make a quick profit. There will be no doubt that when the smugglers got the new iPads, they will smuggle the devices back into China with a few tricks up their sleeve for getting the goods through customs unnoticed. In order to intensify the crackdown on the new iPad smuggling, Shenzhen Customs have announced that smuggling the new iPad into the mainland is illegal, and they will strengthen inspections, according to the Southern Metropolitan Daily.

They are also reminding inbound travelers carrying the new iPad to declare the device at the border. All travelers carrying an iPad, even one that is simply for personal use, must declare it and pay a tax (10% duty) at the border.

Lots of iPads being captured by custom officials

The administration’s reminder comes shortly before the official release of the new iPad in Hong Kong. Since China is not among the first 10 destinations for its sales, this becomes a factor that could encourage smuggling, customs officials said. And according to the administration, mainland sellers of smuggled electronic products have started accepting orders for the new iPad.

Source: AppleDaily (1), (2)
Photo Credit: TechBeer, Unwire.hk, winandmac.com
More Coverage: The Global Times