Fri, Sep 25, 2015 - Page 14 News List

‘Fake’ stores thrive ahead of China’s iPhone launch

‘SILLY PEOPLE’:A clerk at an unauthorized dealership taking pre-orders for the two new models said Chinese are willing to pay extra to acquire them ahead of time

Reuters, HONG KONG

Shenzhen stores display Apple Inc logos in China on Monday.

Photo: Reuters

On a bustling street in China’s southern boomtown of Shenzhen, more than 30 stores carrying Apple Inc’s iconic white logos peddle pre-orders for the new iPhone, a gadget that has become a status symbol among many better-off Chinese.

Many of the stores look just like Apple’s signature outlets, right down to the sales staff kitted out in blue T-shirts bearing the company’s white logo and the sample iPads and iWatches displayed on sleek wooden tables.

However, the world’s second-largest smartphone vendor only has one official store in Shenzhen and five authorized dealers in the area. Most of the stores in the roughly 1km shopping corridor are unauthorized “fakes” — although they are selling genuine Apple products — and their numbers have mushroomed ahead of the release today of the iPhone 6S and iPhone 6S Plus.

“There are many Apple fans in China,” a clerk surnamed Zhao said at one of the unauthorized dealers that opened just two weeks ago. “There are many silly people in China who are willing to pay extra money just to get a new iPhone ahead of everyone else.”

Apple routinely grapples with iPhone supply constraints, particularly in years that involve a smartphone redesign. The new iPhones will only be available on the launch date in China to customers who have reserved online, and the company has said pre-order demand has outstripped supply.

Shenzhen’s unauthorized Apple stores are taking advantage, banking on quick-hit gains from reselling devices bought via authorized sales channels for as much as double the official price to consumers unwilling to wait weeks for stock to arrive.

The fake stores are also taking pre-orders, but say they will have the new phones from today.

Several workers at the stores said they were buying iPhone models in China and in overseas markets such as the US and Hong Kong, from where they would be smuggled across the border into the mainland.

Apple declined to comment on the proliferation of unauthorized stores in China, but said it recommended customers to go to its Web site and buy products from one of the thousands of authorized dealers across the nation.

Some analysts said the presence of fake Apple stores could be a good thing for the company as they promote brand awareness in a country that had just 22 Apple stores in the third quarter, with plans to raise that number to 40 by the middle of next month.

However, the widespread unauthorized reselling of even genuine goods can make it harder for companies to manage their brands and risks disrupting longer-term plans.

The fake Apple store model is proving so lucrative it has even spawned a cottage industry servicing such businesses.

Just a stone’s throw from the street of copycat stores, tucked away in a giant tech mall, two shops offer the logos, uniforms, display shelves and shopping bags needed to make an unauthorized outlet feel like a genuine Apple store.

However, a recent raid by authorities on fake Apple stores has made some cautious. Some shops have blocked signs that read “authorized Apple seller” with promotional banners and covered Apple logos on staff uniforms with stickers, although several vendors said business had not been affected.

Others in the industry said the fake Apple store had become so popular that it was just a matter of time before some shops would be forced to close as the market becomes saturated.

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