Source: blog.karachicorner.com
China - the coolest kid on the block these days, especially in terms of business.
For the last decade China has been playing the lead role in the international arena of investment, with wannabes such as India and Taiwan sneaking envious peaks at their successful neighbour. With the second-largest consumer market and highest potential, companies worldwide are fighting for a piece of the cake. The tables have turned and China is now the one calling the shots. International big players such as Porsche, Google, Louis Vuitton and Apple, are all convinced that China is the way forward. However, breaking through in China is not as easy as it might seem.
Forbes.com highlighted the issue in the article Why The iPad May Succeed in China, Where The iPhone Failed by Shaun Rein last week. It is clear that after failing with the iPhone 4, Apple is determined to succeed with the iPad, and the Chinese consumer seem to agree. Analysts are sceptical, but I agree with Rein and think that this time, they might actually get it right. But what went wrong the first time?
The answer can be summed up as 'lost in translation'. Mr Jobs and the Chinese consumer don't speak the same language (in more ways than the obvious one). Just because the Chinese aspire to western ideals and consumer trends, it doesn't mean their purchasing habits are the same. Further more, they are not prepared to wait two years for the product to reach their market either.
One would think that international success stories such as Google, Wal-Mart and Apple would get the not so small detail of 'getting the consumer what she wants' right. Yet surprisingly, they have all been beaten by the likes of Porsche, GM and Carrefour, all good companies but no marketing-geniuses.
On a more positive note, the iPad seems to appeal to the Chinese consumer more than the iPhone (for many reasons, including the pay-as-you-go structure) and will thus hopefully strengthen Apple's position in China for future product launches. Who knows, maybe in 2020 it will be the Americans who will be crusading to Shanghai for the next iCard?
In a society where 'google' has become a synonym for 'search', and the letter 'i' in front of any product name suggesting "made by Apple", Apple might not be the sexiest investment on the planet, but its products certainly are. In Steve Jobs I trust and therefore recommend, despite being expensive, you to BUY AAPL.
To finish off, some entertainment for all those die-hard Apple fans... ENJOY!
L’Oréal waited more than 5 years before making a profit in China just to ensure that their brand was well established and respected in the mainland. I agree that Apple has an advantage as it is targeting the upper middle class in China which could grow to 1.15 billion in 2030 according to the World Bank. So yes, there is room to create demand for Apple's product. However it is known that the Chinese government can become very capricious with strong products with a sign of sector monopoly within the local market – Apple’s products being one of them. My final thought is that in the short term Apple is a star; it has the possibility to keep on rising if and only if it becomes more cautious and learns from the mistakes of others like Google Inc.
ReplyDeleteI completely agree with Jade. The Chinese market is not easy to crack as a foreign newcomer. On the one hand there are governmental restrictions as according to the WTO agreement China newly agreed to grant foreign enterprises with more than a 50% ownership participation and the allowance of a domestic joint venture partner on their own choice. On the other hand as Charly mentioned in the story, the different perception of products from the Chinese society. It takes time to understand the Chinese market and to establish a brand imagine to gain loyal customers.
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