iPhone 6 and 6 Plus sells like hot dogs in China’s Black Market
The third week of September, to be precise on Friday 19th, was a very important period in the tech world. As the Chinese e-commerce giant Alibaba (NYSE: BABA) was making its debut on the New York stock market, Apple Inc’s (NASDAQ: AAPL) iPhone 6 and 6 Plus were making their debuts in Apple stores. However, in China things were different as both the stock investors and smartphone consumers were blocked from enjoying these with the rest of the world.
On September 9th, Smartphone consumers in countries such as US, Australia, Hong Kong and Japan were elated to hear that iPhone 6 and 6 plus would be available in their respective countries on September 19th. And since the smart devices made their debuts, consumers have been queuing in large numbers at Apple shops. The consumers in China have to wait a while longer as their country is not even listed among the countries where iPhone 6 and 6 Plus are to be shipped this month.
China Black Market
China has a huge appetite for Apple products, and this has led to massive growth of a well organised underground market. The market consists of rogue vendors and private individual willing to risk to take advantage of the thirsty market.
While iPhone 6 and 6 Plus have not been officially launched in China, approximately 5 millions units have already been smuggled into the country. This is according to research agency Counterpoint Research. Nevertheless, the devices are prohibitively expensive.
Over the years, the government of China has promoted local products at the expense of their foreign rivals. Pending the approval of the new iPhone models in China, the black market has thrived with a number of Chinese consumers flocking Hong Kong, Japan and Australia to smuggle these smartphone to their country.
Chinese consumers had to wait for 3 months for iPhone 5 to officially start selling in China. During this whole time, the black market offered them a backdoor to acquire the device, albeit at a higher price.
The hype and buzz surrounding the debuts of iPhone in China has often rejuvenated the market. When the iPhone 5 eventually launched in China in December 2012, 47.8 million units were sold.
Currently, a new iPhone 6 handset fetches as much as $5,000 in mainland China, while in Hong Kong it retails at about $1,300. The same phone is just about $700 on Apple’s Hong Kong website. On the other hand, the Hong Kong vendors sell iPhone 6 Plus at about $3,600, which is more than double the price of its sister.
China’s black market has demonstrated how far people in China, where Apple trails local tech companies and Samsung in market share, are willing to go to get hands on the new iPhone. Isn’t this good news for Apple? However, it is up to the company to speed up its engagement with the Chinese government to sanction the sale of iPhone 6 and 6 Plus in this market, and help its consumers from being exploited by the black market. Until then, the grey market will continue to expand.