The Demand of Grey Market
According to our insider source, Apple has engaged two new security specialists, one for southern China region and the other one is in Hong Kong. They hired people from the US and brought them over. They will oversee the Apple store openings and coordinate with local officials. Previously, Apple only had control over their own private security they hired. Now they can work with the various forms of the city’s public service where the Chinese polices forces can offer. This allows a better coordination if any critical situation take place at the storefront. Apple now has specific people in every stores in China and Hong Kong to watch and gauge the condition, and have given very specific training to all employees on what to do in case of a repeating incident which happened in HK and Beijing. The Apple China website has a new ordering system in place, and so does the Hong Kong one. It eliminates the vulnerability that was present so that the grey market buyers could not flood the website with orders.
and wait to be selected by Apple to purchase their iPhone 5.
What this will do to the flow of goods along the Shenzhen border remains to be seen, what we do know is that any city with a legitimate Apple store will considerably affect the sale business of those unauthorised resellers. We also predict that many mainlanders will pick up Apple goods in Shenzhen instead of Hong Kong. This could mean a changing of strategy for the grey market in the area. We have also been tipped off that there will be another new Apple store in Shenzhen sometime next year, it will be located in Futian district by the metro line, which is geographically closer to the city central. Our sources indicate it will be a bigger store compare to the first one. It is to be opened around the same time as the Hysan center store at Hong Kong, which is going to be the third store for the special administrative region. Apple has two stores in the Hong Kong market now. One is in the IFC center and the other more recent one is the Festival Walk Mall. Both are significant as they represent Apple trying to provide service and take a bite out of the grey market.
to target more China mainland’s customer.
However as what we have noticed, Apple might have failed in this regard. As we previously mentioned Chinese consumers love easy shopping. They just want to walk into the store and buy an iPhone 5 or the latest iPad mini. However at present they have to order online and test their luck, thanks to the reserve and pickup system. If Apple is going to open plenty of stores in China and still having the same issue on retailing, nothing will have changed. This is where the grey market fills that key niche for the Chinese consumer and everywhere else Apple doesn’t have a presence or meet customers expectations. This is why there are fake Apple stores everywhere in China, especially in southern region, and the grey market vendors will still have room to stay on for their business. The People’s Republic – where more than one billion mobiles are in use and is home to the world’s biggest smartphone market – is hugely important to Apple. But Apple just can’t get a U.S. like experience in China, where everyone can walk in and buy whatever they want.