China's got Apple stores...but it's had to wait a while to take part in a global Apple event.

But it might be too little, too late to win back its consumers here.

(SOUNDBITE) (English) MANAGING DIRECTOR, CHINA MARKET RESEARCH, SHAUN REIN, SAYING:

"So Apple is no longer the cool aspiration purchase that Chinese twenty-somethings all want. And young Chinese all want Chinese brands like Xiaomi and even Lenovo."

So if Apple's not cool in China - what is? And how did it get that way?

Shaun took us on a cool brand tour at this Shanghai mall.

(SOUNDBITE) (English) MANAGING DIRECTOR, CHINA MARKET RESEARCH, SHAUN REIN, SAYING:

"So Starbucks is one of the coolest brands in China right now for today's twenty-something. They come here to sort of get luxury in a cup."

(SOUNDBITE) (English) REUTERS REPORTER, JANE LANHEE LEE, SAYING:

"But it's just coffee."

(SOUNDBITE) (English) MANAGING DIRECTOR, CHINA MARKET RESEARCH, SHAUN REIN, SAYING:

"The Starbucks experience is a lot more than just coffee for Chinese. It's an indication that they've reached a certain status. That they're part of a global circle of sophisticates who like to enjoy coffee. It's much more of a lifestyle experience."

(SOUNDBITE) (English) REUTERS REPORTER, JANE LANHEE LEE, SAYING:

"So what can Apple learn from Starbucks about doing business in China and staying relevant and staying cool."

(SOUNDBITE) (English) MANAGING DIRECTOR, CHINA MARKET RESEARCH, SHAUN REIN, SAYING:

"So Starbucks is opening up hundreds and hundreds of outlets in China every year, so Apple could learn a lot from Starbucks. First they have to expand a lot faster. There are still only eight Apple stores in Greater China for Apple which is less than what they have in Pittsburgh in the United States."

(SOUNDBITE) (English) MANAGING DIRECTOR, CHINA MARKET RESEARCH, SHAUN REIN, SAYING:

"Adidas is becoming one of the most popular brands in China. Especially their sub-brand called Neo. It's really hot for today's China's twenty-something year-olds who are looking to be a bit more hip sort of urban cool."

(SOUNDBITE) (English) REUTERS REPORTER, JANE LANHEE LEE, SAYING:

"So what about Nike?"

(SOUNDBITE) (English) MANAGING DIRECTOR, CHINA MARKET RESEARCH, SHAUN REIN, SAYING:

"Nike's growth has really been sputtering in the last few quarters because it's too much sports apparel. The Chinese market has sort of done with, and fed up with sports apparel. There's too much competition."

(SOUNDBITE) (English) MANAGING DIRECTOR, CHINA MARKET RESEARCH, SHAUN REIN, SAYING:

"JDB is one of the most popular drink brands in China today. It's an herbal tea beverage and it actually outsells Coke and Pepsi in many provinces in the country. Chinese love the taste and their advertising campaigns have a lot of young good-looking Chinese models prancing and playing about on the ocean and the beaches."

(SOUNDBITE) (English) REUTERS REPORTER, JANE LANHEE LEE, SAYING:

"What about Coke?"

(SOUNDBITE) (English) MANAGING DIRECTOR, CHINA MARKET RESEARCH, SHAUN REIN, SAYING:

"Coke is not as popular as JDB because it's not considered healthy. Actually Sprite outsells Coca Cola in China today because Chinese think that the lighter-color carbonated beverages are healthier."

(SOUNDBITE) (English) REUTERS REPORTER, JANE LANHEE LEE, SAYING:

"So how can Apple be cool again in China?"

(SOUNDBITE) (English) MANAGING DIRECTOR, CHINA MARKET RESEARCH, SHAUN REIN, SAYING:

"First it has to improve its hardware. It's getting beaten up by Samsung at the high end and it has to have more of an e-commerce play like Xiaomi."

(SOUNDBITE) (English) REUTERS REPORTER, JANE LANHEE LEE, SAYING:

"Will a cheap iPhone help?"

(SOUNDBITE) (English) MANAGING DIRECTOR, CHINA MARKET RESEARCH, SHAUN REIN, SAYING:

"I actually think a cheap iPhone is actually going to hurt their brand image even more. People used to buy Apple because it was the cool must-have item. If they go too cheap it's not going to be the item that everybody's clamoring and aspiring for anymore."

(SOUNDBITE) (English) REUTERS REPORTER, JANE LANHEE LEE, SAYING:

"What about a deal with China Mobile. Will that help?"

(SOUNDBITE) (English) MANAGING DIRECTOR, CHINA MARKET RESEARCH, SHAUN REIN, SAYING:

"China mobile will help because China Mobile is the largest operator in China with about 65 percent of the overall market. So having more points of sale with China Mobile definitely will help. But it's not going to be a game changer like it could have been three years ago, again because their product line just isn't competitive any more on the hardware standpoint."

ENDS

 

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