Fri, Sep 20, 2019 - Page 10 News List

Apple is losing its bloom among Chinese shoppers

PATRIOTIC BUYING:Among Chinese brands benefiting from the trend was sportswear maker Li Ning, which released a collection centered on China’s national colors

Bloomberg

The trade dispute is taking its toll on Apple Inc, a new survey of Chinese consumer attitudes shows.

The company tumbled to No. 24 in an annual report on China’s top brands, falling from No. 11 a year earlier.

In 2017, before the US-China trade spat began, Apple was fifth in this ranking.

Meanwhile, Apple’s biggest local rival, Huawei Technologies Co (華為), climbed two spots and came in second, behind only Chinese payment service Alipay (支付寶).

The shuffle in the rankings is a sign of the growing challenge US brands face in the second year of US President Donald Trump’s tariff showdown with Chinese President Xi Jinping (習近平).

The survey findings show Chinese consumers growing cooler toward some US brands, especially after Huawei saw its chief financial officer, Meng Wanzhou (孟晚舟), arrested in Canada last year at the behest of the US government.

Trump followed with a ban on Huawei products, which helped fuel a surge of local support for the Shenzhen-based brand, according to Jay Milliken, senior partner in Hong Kong with Prophet, the San Francisco-based consultancy that conducted the survey of 13,500 Chinese consumers.

“There’s a lot of nationalistic buying in that category, because Chinese consumers interpreted what happened to Huawei as an attack,” he said.

Patriotism helped fuel the rise of other Chinese brands, too. Sportswear maker Li Ning Co (李寧) cracked the top 40 for the first time, ranked No. 34, just two spots behind market leader Nike Inc.

Named after its founder, the famous gymnast, Li Ning capitalized on nationalistic sentiments of many Chinese consumers with the launch last year of a China Li-Ning collection at New York Fashion Week that heavily used red and yellow, China’s national colors.

There were only two US names in the top 10 this year — Android at No. 3 and Intel at No. 9 — compared with five in the 2017 survey.

Unlike Apple, Android and Intel Corp do not have to worry about consumers switching allegiances to local competitors, Milliken said, which explains why they manage to remain highly ranked.

“Some Western brands are so integral in the lives of Chinese consumers, they’re almost predisposed to not losing relevance,” he said. “There are no Chinese alternatives so those remain super relevant.”

Geopolitical tensions are not the only problem Apple faces in China, its biggest market after the US.

While Beijing is pushing to make the country a leader in the introduction of high-speed 5G networks, Apple’s phones, even the newly announced iPhone 11, do not support that latest wireless standard.

Prophet’s survey, conducted annually, asks Chinese consumers in large cities to rank 258 brands across 27 categories.

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