Steve, make money by opening an Apple Store in Beijing or Shanghai.

Dear Steve,

I hear you are opening a call and research center in India and that you are even traveling to Bangalore to have a look at the center once it is complete. This is a good move. It should keep innovation up and prices down.

I wonder whether you would consider making a quick stop in Beijing or Shanghai as long as you are in the neighborhood. There are some Apple retail centers in these cities, but unfortunately they are not doing much business. Opening an Apple Store in one of these two cities would help in promoting your products and increasing your sales in this region. There are a few good reasons to open an Apple Store in China.

First, China is a pretty big market, the largest consumer market in the world, as a matter of fact, with about 1 billion more people than the United States. Furthermore, China is currently experiencing break neck growth, nearly a 10% increase in GDP year on year, and many Chinese people now have a lot of money and want to spend it on expensive fashion statements, like iPods and notebook computers. I was reading in the April ‘06 Chinese FHM about the top ten essential hard-drive laden gadgets that China’s new-money urbanites should possess. Number one was an Archos Gmini402, number two was an Aigo MPE858 and number three was a fifth gen Apple iPod. Steve, have you ever heard of Archos or Aigo before? The editors of FHM complained about the lack of an FM tuner on the iPod, though they’d heard the rumors about the iPod Video. Aren’t the editors of FHM supposed to be at the forefront of macho things like tech gadgets though? Surely if even they were not aware of the iPod’s new FM capabilities then the average Chinese consumer is completely clueless. Oh, how a simple Apple Store or two with a well trained sales team could change this lack of knowledge amongst the Chinese about the beautiful combination of form and function in Apple products.

Second, China has a big problem with intellectual piracy which extends beyond pirated copies of Windows right on down to making illegal copies of popular software apps for OS X. An Apple Store could help to end this problem by keeping a strict policy against piracy. Did you know that you can purchase a pirated copy of iLife ‘06 for about $20 at any Apple retail center in China? And when it comes to Adobe CS 2, well, let’s just say that it would be cheaper to buy an international roundtrip air ticket and vacation in Beijing for two weeks and buy a copy of CS2 at an Apple retail center while you are there than it would be to drive to your nearest Apple Store in the States and pick up a copy. A strict surveillance system implemented throughout the authorized Apple retail centers and led by the Apple Store’s example might be able to curb the piracy of intellectual property that is so rampant here. This would not only greatly benefit Apple, but also Adobe and Microsoft, both of whom have been hit quite hard on PC software piracy here in the PRC.

Third, the quality of the retail experience in the Apple retail centers could definitely be better. I have had two disagreeable experiences shopping at Apple’s retail stores in China. Generally, the staff is clueless about the products. They know how to plug things in, turn them on and mouse around, but most anything else is beyond their knowledge. They also offer a very poor product tryout experience. I was at the Wangfujing retail center in Beijing the other day and wanted to play around with the new MacBook Pro for a while before asking them about buying some more RAM for my iBook. I fired up the MacBook, took a few shots with PhotoBooth and then proceeded to email them to myself. One of the staff rushed over to me when he saw I had created an airport connection and logged into my DotMac account via Safari to send the email and told me that the store’s regulation was that customers could not get online. I felt like a child being scolded for touching an expensive vase in a museum. Funny this too, since I practically had to drive one of the staff members off the MacBook in the first place so I could spend some time on it, seeing as how all he was doing was playing World of Warcraft, online.

After logging out of DotMac, during which the staff member repeatedly request I shut Safari immediately, impatient for the DotMac services to log me out properly, I decided to play around a bit more with the new features of the MacBook. I tugged on the new magnetic plug. It didn’t budge. I was quite impressed by this. I then pushed it from the side, and, just as advertised, it came out. The monitor also went black. I reconnected it and nothing happened. Hmm, “Is there no battery in this MacBook Pro?” I inquired of the staff member who had just scolded me. “*Tisk*, you didn’t pull the plug out, did you? You shouldn’t have done that. There is no battery in this computer and you can harm the hard drive by doing that.” I winced. “So sorry for testing the new features of the MacBook Pro,” I thought to myself but didn’t say aloud. I had had enough. The thousands of RMB I had brought along to purchase some more RAM stayed in my pocket and I left the store. I won’t be back there again either. Ever. An Apple Store with a well trained sales team would help improve the Apple retail experience in China.

To recap: 1) Opening an Apple Store would be a good way to promote Apple in the world’s largest consumer market; 2) Opening an Apple Store would help to curb piracy of Mac software in China; 3) Opening an Apple Store would vastly improve the Apple retail experience in China. All of these would help to drive sales and increase Apple’s profits.

As for location, I suggest opening up prominent Apple Stores on Shanghai’s Nanjing Lu and Beijing’s Wangfujing, where Apple would be in the good company of Rolls Royce, Rolex and Tiffany’s. You should employ people who are friendly, honest and familiar with Apple products. Also, you should employ at least one native English speaking westerner to work on the retail floor who is knowledgeable about Apple products and who can also speak Chinese. This person would not only serve the large, wealthy, non-Chinese speaking foreign communities in Beijing and Shanghai, but also serve as a good marketing tool, as Chinese tend to relate westerners with high tech stuff, and would consider Apple products to be very advanced computers indeed if there were a westerner working in the store.

Steve, did I mention that I’m a westerner who, in addition to English, can speak, read and write Chinese too?

Hope you have a good time in Bangalore.

All the Best,
Kevin Smith

Tags Apple, China, Retail

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