Apple's opening of an online store in Vietnam, as well as its first physical store in India, means that consumers in Southeast Asia can now directly purchase any of the "Apple" products.
CNN news agency commented that markets such as Vietnam, India, and Indonesia are increasingly important to Apple as growth in developed markets such as China is slowing down, forcing the company to focus on places where it previously operated less actively.
For decades, China has been central to Apple’s rise, serving as the backbone for both production and consumption. But CEO Tim Cook is looking elsewhere. He called developing countries a “bright spot” in the company’s earnings report, and recently said he was “particularly pleased” with the results in those markets in the first three months of the year.
Slowing global growth puts more pressure on Apple to chase emerging markets, according to analyst Dan Ives. He predicts that Indonesia, Malaysia, and India will take a bigger slice of the pie in the coming years.
Speaking to CNN , he said that launching online sales in a country often happens before the physical stores appear. This is very true for India. Meanwhile, according to analyst Chiew Le Xuan, the opening of Apple Store Online in Vietnam on May 16 shows that the company is further consolidating its presence in emerging countries. He revealed that the "giant" has been actively expanding in the region in recent months, increasing distribution and authorized dealer network.
Apple has a lot of room to grow. CEO Cook called the region a “great opportunity” for the company.
The iPhone maker joins a growing list of global companies bullish on Southeast Asia, where they are pouring money into manufacturing. The user base is also promising, with the number of middle-class and affluent households in Vietnam, Indonesia, the Philippines, and elsewhere expected to grow by about 5% annually through 2030, according to Boston Consulting. They call this group “the next super market.”
The appeal of Southeast Asia's middle class is a "golden opportunity for Apple," said Ives.
Still, challenges lie ahead. Premium brands like Apple struggle in emerging markets because of their price. The iPhone—which costs between $470 and $1,100—is considered too expensive for consumers in developing Southeast Asian countries, where smartphones cost less than $200.
Apple’s absence is most noticeable each time a new iPhone is launched, Chiew said. Buyers from Vietnam and Cambodia often fly to Singapore and Malaysia to buy devices and resell them. That could change in the coming years, especially as Apple continues to ramp up its efforts there.
Ives predicts that Apple will continue to expand its ecosystem in emerging markets through different pricing strategies. Once users switch to iOS, they tend to stick with it and become loyal customers. It has been a core part of Apple’s success in China and could be replicated in India, Indonesia and Vietnam.
But Apple will face obstacles in Southeast Asia, where some countries impose strict requirements on foreign companies. In Indonesia, for example, at least 35% of components in electronics sold in the country must be made locally. Similar regulations prevented Apple from opening stores in India until the policy was relaxed in 2019.
And despite growing wealth, Apple’s prices remain high in many emerging markets, where Ives believes growth will be difficult.
(According to CNN)
Source
Comment (0)