The reason why Apple always wins big in China despite political conflicts

China’s policy of prioritizing domestic consumption and staying away from foreign products has so far not affected iPhone purchasing power.

After going on pre-sale on September 17, some colors of the iPhone 13 sold out in minutes. Apple website in China market encountered an error because of too much traffic.

In a video recording the opening day of the iPhone 13 in Shaanxi province, China, buyers jostled in a shopping mall to buy the latest iPhone model. On e-commerce platform JD Daoja, iPhone 13 sales have increased by 470% compared to last year’s iPhone 12 model.

According to author Adam Minter of Bloomberg, It is not uncommon for a new Apple product to be received with great enthusiasm. But considering the US-China relationship, the trend of favoring domestic goods after decades of “foreign marriage” in China, this phenomenon is very remarkable.

Apple once had to go to the water in China

Patriotic consumerism has a long history in China. In 1911, the local silk industry was facing a crisis to survive. After the fall of the last feudal dynasty, the new government encouraged the Chinese to learn modern fashion, including Western-style clothing.

Apple in China 1

Although there is no shortage of Chinese businesses providing technology products, Apple is still a name that has been passionately admired in the country of billions of people for many years.. Photo: Reuters.

Fearing the process would benefit wool produced abroad, the industry (which employs millions of people) helped organize the National Product Movement. The goal of the movement was to promote domestically produced goods as a form of resistance against imperialism.

In 1915, the movement sparked a nationwide boycott of popular Japanese products. Over the next century, nationalism exploded in popularity, coupled with the increased purchasing power of domestic products.

In recent years, Chinese youth are following the trend guochao – roughly translated as “Chinese luxury” – in which products with Chinese elements are valued. The items that benefit the most are apparel and luxury goods.

The authorities have carried out many campaigns, though sometimes with subtlety, to disparage foreign brands and companies. In 2013, the newspaper People’s Daily launched a weeklong campaign targeting Apple.

The American company was described as “unparalleled arrogant” for providing a warranty in China that was inferior to service elsewhere. Apple eventually had to apologize for the allegation.

There are no permanent enemies

However, the anti-Chinese attitude of customers rarely lasts long. In the early 2010s, many protests against Japanese products took place in China. Japanese businesses also have to suffer the consequences in the country of billions of people.

However, just 9 months after the 2012 protests, the number of cars imported from Japan has increased sharply again.

In 2018, Canada’s arrest of Huawei CFO Meng Wanzhou prompted Chinese people to boycott Canada Goose Holdings’ jacket. Two years after being called for a boycott, the retailer announced plans to double its stores in China.

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Apple has managed to build success despite its policies and specific market in China. Photo: Apple Insider.

Despite rising tensions with the US, the same thing seems to be happening with Apple. In the second quarter of 2021, Apple owned 11.9% of the smartphone market share in China, up from 8.3% in the same period last year.

Psychological foreign students

The existence of foreign goods in the Chinese market is explained by many reasons.

First, these products are usually made in China itself. Japanese car manufacturers own large factories here; Apple contractors like Foxconn Technology also employ more than a million people in the mainland.

In addition, Chinese consumers are increasingly spending heavily on high-end products. And whether right or wrong, the word “advanced” is often paired with “foreign”.

In 2016, a survey found that 50% of 10,000 respondents said they were looking for the “best and most expensive” product. In China, where cheap and low-quality goods prevail, this detail reveals a potentially lucrative market for Apple, Canada Goose and other luxury brands.

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The relationship between China and the US may be at a bad point, but that has not stopped the iPhone 13 from being sought after in the country of billions of people. Photo: STR/AFP.

Finally, China’s growing young clientele is much more international than previous generations. That contributes to an open welcome to foreign products and experiences.

In 2019, the Chinese spent 255 billion USD to travel abroad. This is equivalent to about 1.5% of gross domestic product. Despite concerns about the pandemic, a survey in January found that 43% of Chinese wanted to go abroad for their next vacation.

Patriotism, trade wars and even economic sanctions have plagued many foreign businesses in China. Whether with the goal of protecting products or the domestic market, Chinese brands will realize that they don’t need politics and boycotts to convince Chinese to buy domestic products. All they need is a better product.

Meanwhile, the iPhone, the most prominent American product sold in China, has never lost its appeal.

Follow Zing/Bloomberg

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