Apple may view China as its next big market, but the Cupertino company is dropping the ball when it comes to expanding its retail presence in the Asian country, says a report in the New York Times. Back in 2010, former head of Apple’s retail division Ron Johnson predicted Apple soon would have 25 retail stores in China. The company now operates a total of five stores that are located in either Shanghai or Beijing. Reuters estimates that Apple has one store for every 215 million Chinese citizens.
Not only does this create an overflow of customers into the five Apple stores, it also opens the door for a booming grey market where smuggled Apple products are sold by unauthorized re-sellers. Some peddlers don’t even bother trying to get authentic Apple goods and sell cheap Chinese knock-offs that bear a striking resemblance to the real thing. The grey market has gotten so big that several copycat Apple stores have even opened in the smaller mainland cities.
Poor quality products and no customer support from these grey market sellers could tarnish Apple’s reputation and stifle growth in the country. This situation may not entirely be Apple’s fault, however. Some of the delay may be the result of regulatory red tape which makes it difficult for Apple to open new stores at a rapid pace