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Why Chinese Shoppers Are Straying From Apple Products

  Advertisement   Shanghai student Xu Yechuyi wanted to buy a new iPhone last year but couldn’t afford one at Apple Inc’s flagship store, so … Continue reading Why Chinese Shoppers Are Straying From Apple Products


 

 

Shanghai student Xu Yechuyi wanted to buy a new iPhone last year but couldn’t afford one at Apple Inc’s flagship store, so she opted for a used, three-year-old iPhone 6S at less than a third of the sticker price.

The purchase made Xu, 22, one of many consumers priced out of stores and resorting to China’s rapidly growing second-hand handset market, bartering via text-messaging apps and spending money on Apple products that never reaches Apple.

“I think there is a real demand for this sort of second-hand market from less affluent consumers like me,” said Xu.

The second-hand trend adds to challenges Apple faces in the world’s biggest smartphone market, where it has long been losing ground to domestic makers of high-end yet lower-priced handsets such as market leader Huawei Technologies Co Ltd

The first iPhones in China in 2009 brought Apple record profit. But the launch last year of its most expensive handset ever – priced 9,599 yuan ($1,397) – coincided with an economic downturn and a slowing smartphone market, while deteriorating Sino-U.S. trade relations stoked support for local rivals.

Poor iPhone sales in China prompted Apple on Wednesday to lower its quarterly revenue forecast for the first time in over a decade, hammering its shares and those of its suppliers. Chief Executive Tim Cook blamed the trade war and the economy.

Several leading Chinese technology companies also lowered forecasts in the past year, including e-commerce firm Alibaba Group Holding Ltd and search engine provider Baidu Inc, with both citing the impact of the trade war.

Meanwhile, consumer confidence has tumbled since the middle of last year, with its impact rippling through the economy, from overall retail numbers to box office receipts and car sales.

As confidence falls and the economy continues to slow, analysts said the market for used smartphones can only expand. China’s iiMedia Research forecast 144 million users of second-hand smartphones in 2019, up to a third versus last year.

“The macro environment is just not in Apple’s favour,” said Singapore-based IDC senior research manager Kiranjeet Kaur. “People’s spending power is coming down.”

In west Beijing’s tech district, one worker surnamed Zhou at a phone refurbishing firm said she had seen a rise in users looking to upgrade old iPhones instead of purchasing new ones.