Apple to step up store expansion in China

Technology giant also plans to widen the distributor network in its second-biggest market

PUBLISHED : Friday, 02 November, 2012, 12:00am
UPDATED : Friday, 02 November, 2012, 5:30am

Apple, the world's largest technology company, is poised to speed development of new retail stores and network of resellers across China, its second-biggest market.

The bullish forecast by technology analyst firm Forrester Research followed Apple's disclosure yesterday that it would open up to 35 new retail stores worldwide over the next 12 months.

In its filing with the US Securities and Exchange Commission, Apple said "approximately three-quarters" of these branded stores would be outside the United States.

The company's ninth Apple Store in China is scheduled to be launched tomorrow at the Yi Tian Holiday Plaza in Shenzhen.

"We understand that two stores in Chengdu and one in Dalian are already under renovation and will be the next [Apple Store] locations [on the mainland]," Forrester Research analyst Zhao Wenyuan said.

Guangzhou and Chongqing were also on Apple's list but would not be ready in the next couple of months, he said.

The mainland, Hong Kong, Taiwan and Macau comprise Apple's No2 market after the US. The firm has two Apple Stores in Hong Kong, three in Shanghai and three in Beijing, including a three-level shop on Wangfujing Street that is its largest retail site in Asia.

Apple, however, has missed its earlier forecast of establishing 25 branded retail stores in China by the end of this year.

Zhao pointed out that Apple had been trying to increase the size of its retail footprint outside the mainland's major metropolitan areas and into lower-tier cities through large distributors known as "premium authorised resellers".

Previous estimates put the number of Apple's authorised resellers across the mainland at more than 2,000.

In its regulatory filing, Apple said spending for retail store facilities in its current fiscal year to September would reach US$850 million, compared with US$865 million a year earlier, when it opened 33 new stores. Twenty-eight of those stores were outside the US.

The California-based company's total revenue rose 45 per cent to US$156.5 billion in its fiscal year to September 29 from US$108.2 billion the previous fiscal year.

Tim Cook, the chief executive at Apple, last week said China represented about 15 per cent - about US$23.8 billion - of the company's total revenue in its fiscal year to September 29.

"We are continuing to invest in our own retail stores there, we continue to expand distribution [in China] with channel partners as well, and we continue to see it as an extremely exciting market with more and more people wanting Apple products," Cook said.

It has been reported earlier that Apple plans to open a new 20,000 sq ft store at Causeway Bay's Hysan Place.