Hugh Harsono

Opinion | What decline of iPhone grey market says about China’s consumer landscape

Chinese consumer mentality is shifting, propelled by patriotism and won over by innovative local phones offering better value and reliability

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A Huawei customer after attending a new product launch conference in Beijing, on September 25. Photo: AP

Hugh Harsono

Published: 8:30pm, 12 Jun 2024

In China’s not so distant past, the latest iPhone was a status symbol and the grey market thrived as a way to get it to consumers faster and cheaper. Fuelled by price arbitrage and early access, iPhones from Hong Kong flooded the mainland market in the early 2010s. But times have changed.

Through China’s iPhone grey market, the evolving desires of Chinese consumers can be explored. The shift from seeking pure novelty to prizing value and unique features is changing the game, with domestic brands like Huawei Technologies and Xiaomi rising in popularity.

By analysing the iPhone grey market, it is possible to gain valuable insights into the changing preferences of this crucial consumer segment, a shift driven not just by economics but also by a growing sense of national pride.

The attraction of Apple’s most popular flagship product, the iPhone, arguably lies in its user-friendly interface and design, fast performance and distinctive brand.

Hong Kong, is typically seen as the epicentre of China’s iPhone grey market, which boomed in the early 2010s when iPhones were much more easily available abroad. Apple opened its first shop on the mainland in 2008 and, by 2015, despite the huge demand, had expanded to just 20 shops, a paltry 4 per cent of its stores worldwide at the time.

Taxes on the mainland on foreign goods also drove consumers to the grey market in search of lower prices.