Apple Brings App Store, Online Retail to China

Apple made a lot of money from direct sales last year, so it isn't surprising that it would expand its online store to China, possibly its largest market in terms of growth potential. Nor is it shocking that it would expand the App Store's reach there. Both initiatives launched yesterday.

Chinese expansion has been a long, difficult road for Apple. It took over two years for the iPhone to arrive in China, due largely to a lengthy negotiation process between the Chinese government, China Unicom (which is essentially government-controlled) and Apple. Eventually, the iPhone 3GS went on sale, albeit without Wi-Fi capabilities initially due to government restrictions.

The new online store allows shoppers to order all the latest Apple products, including the iPhone 4 and iPad, and have them delivered. Until now, Apple customers in China had to make the trek to one of four brick-and-mortar Apple stores in Shanghai and Beijing in order to make a purchase, though they had the option of pre-ordering the product from Apple's Chinese website. Also available at the new site are custom engraving options, free shipping and customizable hardware configurations.

The addition of direct-to-door delivery options is a huge step for Apple. China, though developing economically at a fast pace, is still significantly behind in terms of roadways and infrastructure development. The new Apple store does notify customers that deliveries outside of major urban areas will add a few days to shipping times. Apple's willingness to deal with the difficulties of delivering anywhere in mainland China shows its commitment to the emerging market.

Apple has only a 7.1 percent share of China's smartphone market, with Nokia, Samsung, Motorola and Sony Ericsson ahead of the iPhone maker. Expanding its retail presence into e-commerce is the best way for Apple to start moving up that list, since Chinese consumers are spending billions online every year.

Also open for business is a simplified Chinese version of the App Store. In order to make purchases in the App Store, customers need to have dual-currency credit cards, a move put in place to prevent fraud. It's a barrier to entry, but it should still expand Apple's reach and help encourage more iOS device hardware sales.

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http://gigaom.com/apple/apple-brings-app-store-online-retail-to-china/

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