Chinese do not see Apple as a luxury watch maker - Tom Doctoroff

+Tom Doctoroff 

Apple expects to make a blast with its watches, just as it did with iPhone and iPads. But success in the China market is not that obvious, says marketing expert Tom Doctoroff in Bloomberg. They will have to prove themselves, he says.

Bloomberg:

Apple opened six stores in China in the six weeks before the 9 March press conference, including the one in Hangzhou, bringing the total to 21. The company has said it plans to have 40 stores in the country by the middle of 2016. 

In China, perhaps even more than the US, Apple will have to prove itself as a luxury watchmaker, says Tom Doctoroff, head of J. Walter Thompson’s Asia Pacific arm and author of What Chinese Want. In a market where luxury cars are seen as coming from Germany and fine wines from France, Doctoroff says, smart watches will have a tough time dislodging Rolex. “Generating face, or social currency, requires instant telegraphing,” he says. “The Apple Watch will compete with expensive watches that project identity in a rather immediate way. Even though Apple is creating the gold-cased Edition, this will be faux luxury to elite Chinese.” 

A quick survey of shoppers perusing watches in Beijing on 10 March suggests that Apple has work to do before it starts shipping its gold to China. Chen Zhiting, a 55-year-old retired commodities broker, was looking to buy what he called a “sporty” watch for as much as $8,000, but the 18-karat Edition wasn’t on his radar. “Does Apple make watches?” Chen asked.  “I thought they were the iPad people.”

More in Bloomberg.

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Apple watch: a winner among luxury buyers - Rupert Hoogewerf

Rupert Hoogewerf

Apple´s watch got a lackluster welcome worldwide, but luxury industry watchers in China expect the new device will make a blast in the China market. China Rich List founder Rupert Hoogewerf explains in the International Business Times why the watch is so attractive.

The International Business Times:

Apple is well-placed to capitalize on Chinese urban consumers’ interest in new technology, thanks to its reputation for innovation and reliability, said Rupert Hoogewerf, founder and CEO of Hurun Report, which tracks trends among luxury buyers in the country. For the first time, Apple this year topped Hurun’s list of wealthy Chinese consumers’ favorite brands for giving as gifts, overtaking fashion brands such as Hermes and Louis Vuitton, as well as luxury-watch makers. To an extent, this may reflect the impact of China’s current anti-corruption campaign, which has cooled sales of more ostentatious luxury brands, Hoogewerf said. 

However, Hoogewerf indicated Apple has succeeded in catching the imagination of Chinese shoppers. “People like new products, and the fact that Apple constantly updates its product range means you can always find something new to give as a gift,” he said. “It’s beating the luxury brands at their own game.” 

Hoogewerf also argued that even if some younger consumers are less used to wearing watches, there remains “an inherent appreciation of watches in China” among a slightly older generation, who see famous Western brands both as status symbols and as objects to be collected.

More in the International Business Times. 

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Why the Apple watch will be a hit in China - Shaun Rein

+Shaun Rein 

Apple´s latest iPhone has been a huge success in China, after the company had more problems entering the China market earlier. But the Apple Watch is going to be a success, expects business analyst Shaun Rein, according to Bloomberg.

Bloomberg:

Apple’s China sales rose 70 percent in the past quarter, helped by the introduction of the iPhone 6 and 6 Plus. By moving to a screen that’s bigger than a traditional smartphone’s but smaller than a tablet’s, the iPhones were popular in a market where consumers prefer to carry one device. 

The Apple Watch is “going to be a massive hit in China,” said Shaun Rein, managing director of China Market Research in Shanghai. “It’s a brand that’s aspirational, but it’s not so over the top in price.” 

Greater China contributed more than $16 billion to Apple’s sales in the past quarter, about 21 percent of the company’s total. The country still ranks behind the Americas and Europe in total revenue. Yet Chief Executive Officer Tim Cook has said China eventually could become the company’s biggest market.

More in Bloomberg.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´ request form.

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Apple´s capitulation to China gives Obama a problem - Ben Cavender

+Benjamin Cavender 

China´s proposal to IT vendors to give access to their devices to fight terror has raised the tensions in the industry. Apple seems to have agreed to share its source code with China, and that might cause Obama a headache, says business analyst Ben Cavender in Quartz.

Quartz:

Apple’s capitulation to China’s demands weakens Obama’s position, and makes life even more difficult for other US tech companies, analysts say. The US tech industry has been lobbying against the Chinese cyber-security regulations, and US secretary of state John Kerry and other US officials sent a letter of complaint to their Chinese counterparts last month. 

“Apple does place the Obama administration in an awkward position, as it is one of the largest tech companies in the world and it seems to be willing to open its doors in return for market access,” Ben Cavender, a Shanghai-based analyst at China Market Research Group, told Quartz. “This could definitely make it harder for the administration to effectively argue that companies will not be willing to concede to demands from the Chinese government.” 

None of Apple’s competitors, or the tech industry trade groups lobbying the Chinese government, would comment on the topic on the record. But some executives said privately that Apple has a long tradition of acting independently from the industry when it comes to dealing with foreign governments.

More in Quartz.

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IPhone 6 key gift for Chinese New Year - Shaun Rein

+Shaun Rein 

A reasonable price and still a premium, those are the assets of the iPhone 6 as a key gift for Chinese New Year business analyst Shaun Rein notes at CNBC. "The anti-corruption drive is more serious than most analysts realize," said Rein.

CNBC:

Chinese corporates and wealthy consumers are taking gift-giving down a notch this Lunar New Year, opting for iPhones instead of Birkin bags or Louis Vuitton wallets. 

The annual holiday, which falls on February 19-20 this year, is a time of gift exchange between family, colleagues and business contacts. 

"The iPhone 6 has replaced luxury items as a key gift this Chinese New Year," Shaun Rein, founder and managing director of the China Market Research Group told CNBC. 

"Corporates, for example, used to buy luxury products to give their high performing employees, now they are giving iPhones because they more reasonably priced and still considered premium enough," he said. 

Choosing to gift iPhones over a designer handbag fits in the vein of the government's corruption crackdown, Rein noted. 

"When you gift a Berkin bag—it's too high profile everyone knows its super expensive and in this anti-graft campaign brings about questions of ill-gotten gains and corruption," he said... 

China's luxury sector has been reeling from Beijing's crackdown on conspicuous spending, the economic slowdown and changing consumer preferences. 

"The anti-corruption drive is more serious than most analysts realize," said Rein. 

It impacts the luxury sector on three fronts: Government officials can no longer get away with using public funds to buy luxury items; businessman are buying fewer luxury gifts for government officials; and corporations are opting for less flashy products to reward their employees.

More at CNBC.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´ request form.

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Apple takes top spot as luxury gift - Rupert Hoogewerf

Rupert Hoogewerf

US tech giant Apple has taken over the number one position as most popular gift from designer good maker Hermes, according the the newest Hurun luxury report. Travel is the main driving force, says Hurun founder Rupert Hoogewerf as Chinese buy 7 out of 10 luxury products overseas, according to Reuters.

Reuters:

Apple Inc has taken the number one luxury gifting spot in China from designer goods maker Hermes International SCA, according to a Hurun luxury report on Thursday, reflecting the iPhone maker's recent hot streak in the country. The U.S. tech firm's focus on glitzy stores and high prices helped it post a 70 percent rise in sales in China in the last three months of 2014 and powered the company to the largest profit in corporate history. 

Spending on gift-giving overall dropped 5 percent in 2014, after a 25 percent drop the year before, according to the Hurun Chinese Luxury Consumer Survey. Beijing has been cracking down on corruption and luxury spending among public officials, weighing down sales of premium liquor to handbags. 

Domestic luxury spending in China dipped for the first time last year, according to consultancy Bain & Co, with increasing numbers of shoppers looking to spend money overseas. 

"Travel retail continues to change the dynamics of luxury in China, with 7 out of 10 luxury goods bought by Chinese now being bought overseas," said Hurun Report Chairman Rupert Hoogewerf.

More at Reuters.

Rupert Hoogewerf is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´ request form.

Are you interested in more experts on luxury goods at the China Speakers Bureau? Do check out this list.  

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Apple leaves troublesome past behind - Shaun Rein

+Shaun Rein 

For a long time, Apple did not get it right in China. Business analyst Shaun Rein notes that now the American giant is doing things right and ships more smartphones to China, even more than Xiaomi. From Mercury News.

Mercury News:

One gusher of growth the company has yet to fully tap is the Chinese market. The company raked in $16.1 billion in revenue there during the quarter, up 70 percent year over year. For the first time, Apple shipped more smartphones in China than any other manufacturer during the fourth quarter of last year, according to research firm Canalys. But Apple still has ample room to grow in the country, with smartphone market share of about 12 percent, according to Counterpoint Research. 

Shaun Rein, managing director of China Market Research Group, said Apple has come a long way in China, where it previously had struggled to compete without larger phones. "Now with iPhone 6 Plus, they have become the must-have item," he said. "It's really quite remarkable how much people are adopting it." 

Apple CFO Luca Maestri said the company is on track to have 40 stores in greater China by mid-2016. 

But Apple will need to step up the pace of store openings to make the most of the opportunity and give as much attention to the Chinese market as it gives to the U.S., Rein said. 

"Apple is succeeding in spite of itself in China because they have bad distribution," he said. "It's bigger, and people are willing to pay more." 

Analysts will also be closely watching the sales for other Apple products such as the Apple Watch, the company's first brand-new product since the iPad.

More in Mercury News.

Shaun Rein is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´ request form.

What are the new trends for China in 2015? Here are our seven trends.  

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Unlikely: Apple giving access to China - Ben Cavender

+Benjamin Cavender 

State media hailed a deal between Apple and the Chinese government to give access to Apple devices, including the source codes. An unlikely scenario, tells business analyst Ben Cavender to QZ.

QZ:

Other analysts agreed Apple had probably promised to turn over its source code to China’s government, but disagreed about the consequences.

The access would allow the Chinese government to “run spot checks” on how Apple is protecting user information, and to determine whether other intelligence agencies are trying to snoop on China, said Ben Cavender, a principal at China Market Research Group in Shanghai.

If that is in fact what has been agreed, it’s a landmark deal, Cavender said, and Apple has not generally provided such information to other governments.

“This is a unique situation where China is such an important market to Apple, and they need to be in it. They don’t have the leverage they might ordinarily have,” he said. Still, Cavendish said any agreement would be limited in scope.

“I find it improbable that the Chinese government will have access to anything outside China,” Cavender said. And if the Chinese government did manage to snoop Apple users or services outside the country, “someone at Apple would probably notice,” he said, which would limit the risk for Apple’s worldwide customer base.

Inside China, users are likely to be blasé about any attempts by the government to use its access to snoop on Apple users. “People here kind of operate under the assumption that the government is already looking at what they’re doing,” Cavender said.

More in QZ.

Ben Cavender is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

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