Date
17 December 2017
Apple is a global company but it needs to localize its approach to China. Photo: Bloomberg
Apple is a global company but it needs to localize its approach to China. Photo: Bloomberg

Ahrendts and Apple’s next big thing: China

Angela Ahrendts has the future of the world’s most valuable company on her shoulders. The new retail head of Apple Inc. has been charged with steering the gradual transformation of the company’s retail business as rivals like Samsung Electronics nip at its heels.

Ahrendts steps into the position after an eight-year stint at the helm of luxury clothing firm Burberry and is Apple CEO Tim Cook’s first major appointment since he became chief. She is a key element of Cook’s efforts to step out of the shadow of his predecessor, Steve Jobs, and one of her main missions will be to expand Apple’s presence in China, according to industry website 9to5Mac.

Apple today has more than 420 stores across the world, more than half of which are in the United States. But its international retail sites, including those in China, are expanding much faster than in the US. Apple so far has 10 stores in China and aims to triple that number in the next two years.

For Cook and Ahrendts, China is a market that can’t be ignored. It is the company’s second-biggest contributor to revenue and holds out the promise of much more growth. Apple has already put extra focus on the China market with the debut of iPhones and iPads earlier this year compatible with the homegrown TD-LTE system and a tie-up with China Mobile (00941.HK).

But the company needs to push deeper into the country and that means changing retail networks. Ahrendts said Apple needs to focus on making its stores and retail marketing initiatives friendly to China, saying the tastes of Chinese consumers are critical across the globe. She did not offer many details on how that might be achieved.

One thing is clear, though: If Apple doesn’t do something it will lose even more ground to Samsung and local players. 

Samsung has made a concerted push in China, hiring mainland managers to run ever more stores in second- and third-tier cities. The South Korean company also opened its first China Samsung Experience “shop-within-a-shop” at a Suning outlet in Shanghai, with plans to grow that number to no fewer than 100 nationwide. 

Apple is without a doubt a global company built on the universal appeal of its sleek, market-leading products but if Cook and Ahrendts are to get to the heart of growth in China they will need to zoom in and adopt a more localized approach for the Chinese consumer.

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SC/JP/SK

 

EJ Insight writer

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