Apple will close one of its retail outlets in China for the first time.
Apple Closes Retail Store in Dalian City, China
Apple Inc. has announced the closure of its retail store in Dalian City, China, located at the Parkland Mall in the Zhongshan District. The store will close on August 9, 2023, marking Apple's first retail store shutdown in China since its market entry in 2008.
The closure is primarily due to changes in the retail landscape of the shopping complex. Several retailers have departed from the mall, and it has undergone management changes, including rebranding to Intime City. This has reportedly impacted foot traffic and the overall viability of the location for Apple.
In addition to these local mall dynamics, Apple faces broader challenges in China, including fierce competition from domestic brands like Huawei. The company's overall iPhone sales in China have reportedly struggled amid an economic environment marked by deflationary pressures, slower consumer spending, tariffs on exports, and a general cooling of the retail market.
Despite this closure, Apple is continuing to expand its retail presence in China. It will keep its other Apple Store in Dalian open and offer affected employees opportunities to transfer to other stores. Apple is also opening a new store at Uniwalk Qianhai in Shenzhen on Aug. 16.
This strategy suggests a shift towards a greater emphasis on online expansion and selective physical store presence in response to market conditions. Apple is focusing on opening up its online retail store in new places, such as India and Saudi Arabia, and updating or moving older physical locations.
Apple is not alone in facing these challenges. Retailers like Coach, Sandro, and Hugo Boss haven't renewed their leases in Parkland Mall in recent years. The company stated that it is focused on providing an exceptional customer experience both online and at its retail stores across Greater China.
Apple's overall retail expansion has slowed since the pandemic hit, but the company is expanding soon with new stores in Detroit, the United Arab Emirates, Saudi Arabia, and India. The company opened its first store in Malaysia last year and plans additional locations in Beijing and Shanghai over the next year.
Other upcoming closures include the Partridge Creek store in Michigan and the Hornsby location near Sydney. Apple is becoming more selective in renewing its leases and will close a store in Bristol, UK, on the same day as its closure in China.
In conclusion, Apple's closure of the Dalian retail store is due to the departure of several retailers from the mall, intensified local competition, and changing consumer behaviors in China, prompting the company to consolidate its physical presence and prioritize online expansion.
It appears that Apple is adjusting its retail strategies in response to the evolving market conditions in China, shifting focus towards online expansion while maintaining selective physical store presence. The company's decision to close its store in Dalian is influenced by the departure of several retailers, intensified local competition, and changing consumer behaviors. Despite this, Apple is continuing exports of its products, as it expands its online retail store to new locations such as India and Saudi Arabia.
