China Still Loves Apple, Politics Aside
Opinion
Adam Minter
Relations between China and the US may be scraping new lows, but that hasn’t stopped Chinese consumers from snapping up the iPhone 13. Shortly after pre-sales for the phone opened on Sept. 17, some colors sold out in minutes. Apple Inc.’s China website crashed. Social media erupted. A week later, as in-store sales began, eager buyers stampeded through a shopping mall. Sales of the handset on JD Daojia, a leading e-commerce platform, ran 470% over last year’s iPhone 12. Of course, a frenzy over a new Apple product isn’t unheard of. But for the past few years, Chinese consumers have increasingly embraced domestic products after decades of favoring foreign ones. Trade wars, patriotism and US sanctions on Huawei Technologies Co. have all played a role. So have anti-Apple campaigns by the authorities. Yet the iPhone, arguably the most prominent US product sold in China, hasn’t lost its allure. Why? Consumer nationalism has a long history in China. In 1911, the local silk industry faced an existential crisis. Following the fall of the last imperial dynasty, the new government encouraged Chinese to adopt modern fashion, including Western-style clothes. Worried that this push would favor foreign-manufactured wool, the industry (which employed millions) helped organize a National Products Movement that promoted locally made goods as a form of anti-imperial resistance. In 1915, after “humiliating” Japanese incursions on Chinese sovereignty, the movement inspired a national boycott of popular Japanese products. Over the next century, through China’s economic collapse and revival, bursts of angry nationalism were paralleled by surges of patriotic consumption. In 2005, Japan’s effort to join the United Nations Security Council inspired nationwide protests, riots (during which Japanese cars and businesses were trashed), and boycotts. Four years later, similar protests erupted over Japanese sovereignty claims in the East China Sea. In 2018, Canada’s detention of Huawei executive Meng Wanzhou spurred nationwide calls for a boycott of the down jackets made by Canada Goose Holdings Inc. In recent years, younger Chinese have been embracing a trend called “guochao” — roughly, “China chic” — in which products (especially apparel and luxury goods) featuring Chinese elements are esteemed. The authorities have done their part with campaigns — sometimes subtle, sometimes not — to disparage foreign brands and companies. In 2013, the state-owned People’s Daily ran a weeks-long campaign accusing Apple of “unparalleled arrogance” for offering warranties in China that were less robust than those offered elsewhere. (Apple eventually apologized.) Such efforts have rarely held up for long, however. Nine months after the 2012 anti-Japan protests, Japanese car imports had rebounded sharply. Similarly, two years after calls for a Canada Goose boycott, the retailer announced a plan to double its stores in China. Despite rising tensions with the US, the same seems to be happening for Apple. In the second quarter, Apple owned an 11.9% share of China’s smartphone market — up from 8.3% in the same period last year. Several factors explain the persistence of foreign goods in the Chinese market. First, they’re often made in China. Japan’s automakers own massive Chinese factories; so do Apple contractors such as Foxconn Technology Co. (which employs more than 1 million people on the mainland). Chinese consumers are also increasingly spending on premium products, and — right or wrong — “premium” is still typically associated with “foreign.” One 2016 survey found that fully half of 10,000 respondents said they seek the “best and most expensive” product. In China, where low-cost, low-quality goods predominate, that leaves a lucrative niche for Apple, Canada Goose and other high-end brands. Finally, China’s growing young consumer class remains far more cosmopolitan than prior generations, and that translates into a continued openness to foreign products and experiences. In 2019, Chinese travelers spent $255 billion abroad, the equivalent of about 1.5% of gross domestic product. Despite Covid concerns, a survey in January found that a whopping 43% of Chinese want to go overseas for their next holiday. That’s hardly the picture of a generation turning inward. None of which is to say that foreign brands can take China for granted. Last year, Huawei’s high-end Mate smartphones were beginning to offer Apple stiff competition. Thanks to US sanctions, that competition was cut short. But Apple shouldn’t rest easily. Eventually, Chinese brands will realize they don’t need politics and boycotts to convince people to buy Chinese. They just need better products. Bloomberg
from Asharq AL-awsat https://english.aawsat.com/home/article/3217951/adam-minter/china-still-loves-apple-politics-aside
No comments:
Post a Comment