Apple Inc. is about to open two new flagship stores in Chengdu and Shenzhen, two major Chinese cities, in an effort to expand its presence in one of the world's most lucrative emerging markets, Reuters reported on Wednesday, June 6. Apple already has five existing stores covering two provinces in China.
Apple's existing flagship stores are located in two of the most affluent areas in China - two stores operate in Beijing, the country's capital city, and three in Shanghai, China's most populous metropolis. The new locations would extend Apple's reach southward covering Shenzhen and Chengdu, where Apple manufacturing partners such as Foxconn operate fabrication facilities. Shenzhen, located in the Guangdong province, has a population of more than 10 million, while Chengdu, located in China's Sichuan province, has a population of over 14 million.
Opening new outlets in Shenzhen and Chengdu will likely add a major boost to Apple's business in the country. Back in April, the Cupertino, California-based tech giant reported quarterly profit that nearly doubled due to a surge in iPhone sales, particularly in the greater China region.
Trouble in Paradise
On the other hand, selling iPads in Shenzhen could result in even more litigation, as Roger Xie, a lawyer for Proview Technology (Shenzhen), told Reuters that Proview would seek an injunction to ban Apple's tablets if the company tried to sell them there. Apple and Proview are currently engaged in a legal battle in the Higher People's Court in Guangzhou over the right to use the iPad trademark, which Proview claims it owns. According to Xie, both sides are currently in court-mediated negotiations.
While Apple's flagship stores are generally flooded by people buzzed with the latest Apple devices and its product launches draw a sea of enthusiasts, the company still faces problems in the country: unauthorized re-sellers sell smuggled imports of Apple products in poorer cities. Piracy is also a great problem in China, so great that entire fake Apple stores were created, fooling employees that they actually worked for Apple.
Final Stage
According to an official with the Market Supervision Administration, who Reuters said only gave his last name as Ni, Apple submitted documents on Monday, June 4, to the Shenzhen government to open an outlet in Holiday Plaza, a high-end mall in the Nanshan district. "Apple is in the final stage and only needs to submit an environmental permit in order to gain approval," said Ni, as cited by Reuters.
In the southwestern Chinese city of Chengdu, Apple obtained approval in late May to open a business unit to offer retail sales and after-sales service, said an official with the Chengdu Industry and Commerce Administration bureau, according to Reuters. Apple's China Web site already features job openings to staff Apple Store outlets in Chengdu and Shenzhen.
