Apple marks a notable retreat in China, closing a store there for first time ever
Apple
Inc. is set for its first-ever retail store closure in China, marking a pivotal moment in its operations within a crucial market. The company announced on Monday that its Parkland Mall store in the Zhongshan District of Dalian City will shut its doors on August 9, citing shifts in the shopping complex's environment.
This decision comes as Apple continues to navigate a challenging landscape in China, where it currently operates around 56 stores, accounting for over 10% of its global retail footprint of more than 530 outlets.
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In its statement, Apple highlighted its commitment to delivering an exceptional customer experience, both online and through its numerous physical locations in Greater China, adding that the decision to close the Parkland Mall store follows the departure of several other retailers from the complex, signalling a broader trend affecting retail dynamics in the region.
China is currently facing deflationary pressures, with declining consumer spending and global tariffs impacting exports. The country's retail sales growth has been lower than anticipated, and home prices have seen a quicker decline. Amid these economic challenges, Apple's sales in China dropped by 2.3% to $16 billion in the second quarter, falling short of analysts' expectations of $16.8 billion.
Inside Apple's China drawdown
The Parkland Mall location is one of two Apple stores in Dalian City, with the other situated in the Olympia 66 shopping complex, which will remain operational.
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Employees affected by the closure will be offered opportunities to transfer to other locations, Apple said. The two stores are conveniently located approximately ten minutes apart.
Despite this closure, Apple is not withdrawing from the Chinese market entirely. The company is poised to open a new store at Uniwalk Qianhai in Shenzhen on August 16 and has plans for additional locations in Beijing and Shanghai over the next year.
Earlier this year, Apple opened a new store in Anhui province and is also looking to expand in other international markets including Detroit, the United Arab Emirates, Saudi Arabia and India.
i for India...
India became the top supplier of smartphones to the US in the June quarter beating China. To a large extent, it was a result of Apple's move to speed up shifting of iPhone assembly operations to India from China in the wake of trade and tariff uncertainties, ET reported citing research biggie Canalys.
The uncertain outcome of ongoing negotiations between Washington and Beijing over a trade deal has accelerated Apple's supply chain restructuring, it said.
The share of made-in-China US smartphone imports in June quarter came in at 25%, a huge fall from 61% a year earlier, with India capturing most of this reset.
As per recent data, Apple is increasingly going bigger on India under
China Plus One
. The company now even manufactures and exports the more-complex Pro models from India, Canalys said. However, it still depends on China manufacturers for increased supply of its Pro models to the US.
A broader sitemap rejig
It may be noted here that retail expansion for Apple has slowed since the pandemic, prompting a shift in focus towards enhancing its online retail presence in emerging markets such as India and Saudi Arabia.
The company has also shown a more selective approach to renewing leases, evidenced by the closure of its store in Bristol, UK, on the same day as its Chinese store. Other imminent closures include locations in Michigan and Sydney.
The retreat from the Parkland Mall is not unique to Apple; several other major brands have also exited the complex. Recent changes in ownership at the mall have led to a series of retailers, including Coach, Sandro, and Hugo Boss, opting not to renew their leases, further indicating a shift in the retail landscape.
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