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Apple Company’s Decline in China Essay

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Updated: May 16th, 2021

Introduction

Apple is one of the most well-known brands in the world, and it is associated with luxury, status, the American way of life, or rather a part of the global culture. The brand became successful in China as well, and the sales in this region accounted for approximately 20% of all sales in the early 2010s (Keizer, 2014). Young Chinese people were eager to have this kind of mobile phone as it showed their financial status and their awareness of global trends (Nasr, 2015).

Nevertheless, the rapid growth in the 2000s stopped in the 2010s when Chinese customers were dissatisfied with some news concerning Apple (Pun et al., 2016). However, Apple’s growth is now declining due to several reasons including marketing errors, the lack of brand loyalty in Chinese people, growing competition, and some ethical issues.

Main body

One of the reasons behind Apple’s decreasing sales is Chinese people’s low brand loyalty (Beattie, 2012). Although the fashion on Apple was a common trend in the 2010s, new favorites and exclusive local brands become popular among Chinese customers. Beattie (2012) also stresses that the advertising volume of Apple is not sufficient for the region, which contributes to the declining loyalty.

According to Beattie (2012), Apple also forces its customers to be integrated into their own software system, and this is often inconvenient in China. The government often poses certain restrictions and limits making customers and companies use particular channels and systems. Moreover, Chinese customers want to have many options instead of using only a limited set of platforms. Finally, high prices are also regarded as an obstacle to buying an Apple product.

The growing competition is another serious issue Apple has to address. Lin and Strumpf (2017) claim that the Chinese market is becoming saturated with high-quality (including luxury) products and brands. Such brands as Samsung and Xiaomi gain more and more popularity in their region due to their lower prices and more properties valued in the country. One of the examples of such sensitivity to customers’ needs and wants is the production of mobile phones that include the “beauty” function.

This feature brightens’ and improves users’ selfies and pictures. More importantly, local brands offer models with fast-charging batteries, which is highly valued by Chinese customers (Lin & Strumpf, 2017). The availability of different options that address customers’ needs draws people’s attention to other brands and makes Apple less attractive.

At the same time, ethical problems may be the most relevant problems that contribute to the decline of Apple sales in China. One of the most discussed topics of the early 2010s was the low salaries and inappropriate labor conditions of Chinese people working at plants that manufacture Apple products. Pun et al. (2016) note that the stories of Chinese workers who committed suicide at their plants made people less willing to buy from Apple.

Foxconn was one of the primary targets of criticism as the company made huge profits, but paid low salaries and did not care about its workers’ safety and health. It has been reported that the labor cost associated with the Chinese labor force accounted for less than 2% (Pun et al., 2016). Chinese people, as well as the global public, blamed corporations for their greed that caused workers’ horrible deaths.

Furthermore, Apple was criticized for the lack of users’ data security. Customers’ were afraid that their locations, as well as other information, can be obtained through mobile phones’ feature frequent locations (Keizer, 2014). This theme received substantial attention in the Chinese society where people are preoccupied with their personal information confidentiality. Various Chinese television programs were devoted to this topic, and customers, IT specialists, and officials discussed the possibility of losing their data. Apple made an announcement that frequent locations are not stored anywhere except for users’ iOS devices (Keizer, 2014). However, this kind of explanation was not reassuring enough for Chinese users. As a result, the brand was losing its popularity at a higher pace.

Conclusion

To sum up, it is possible to note that Apple made a remarkable entry into the Chinese market and earned a considerable share. However, this success was not lasting as Chinese people changed their preferences quite quickly. At the dawn of Apple sales in China, people saw Apple products as must-haves that show their status and their cosmopolitanism. Nevertheless, customers’ attitudes changed during several decades. Apple’s focus on their own software, high prices, the lack of advertising, inappropriate policies concerning the Chinese labor force, and data safety issues contributed to their decline in the Chinese market.

On top of that, external factors had a significant effect on the development of the brand in the Chinese market. Chinese people have always lacked brand loyalty, and the emergence of high-quality products manufactured locally with the focus on users’ specific needs also made Apple mobile phones less attractive in China. These marketing errors that included the company’s inability to address internal and external challenges led to quite a rapid decline in sales and the overall popularity of the brand.

References

Beattie, A. C. (2012). How long can Apple sustain its torrid growth in China?: IPhone is must-have status symbol but long-term brand fanaticism is missing. Advertising Age, 83(24). Web.

Lin, L., & Strumpf, D. (2017). Chinese phones take on Apple. Wall Street Journal. Web.

Keizer, G. (2014). . Computerworld. Web.

Nasr, R. (2015). . CNBC. Web.

Pun, N., Shen, Y., Guo, Y., Lu, H., Chan, J. & Selden, M. (2016). Apple, Foxconn, and Chinese workers’ struggles from a global labor perspective. Inter-Asia Cultural Studies, 17(2), 166-185. Web.

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IvyPanda. 2021. "Apple Company’s Decline in China." May 16, 2021. https://ivypanda.com/essays/apple-companys-decline-in-china/.

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IvyPanda. (2021) 'Apple Company’s Decline in China'. 16 May.

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