Apple introduces unprecedented discounts on iPhones during China's annual '618' shopping festival
Amidst slow consumer demand, Apple joins other major brands in China to roll out significant price reductions on iPhones during the annual '618' shopping extravaganza.
Apple is giving significant price reductions in China during the annual "618" shopping festival to compete with other big brands and retailers amidst slow consumer demand.
The tech giant's discounted prices are a response to tough competition from Chinese smartphone companies like Huawei and Vivo, as well as a decrease in market share in the world's second-largest economy.
Apple announced on Monday that it will be reducing prices on certain smartphones on Tmall, a site similar to Amazon that is owned by Alibaba. The discounts will be up to 23% off and will last until May 28.
As part of the promotion on Apple's official store on Tmall, customers can purchase an iPhone 15 for 4,599 yuan ($639), which is a discount of 1,400 yuan ($194) from the original price.
Apple is aiming to increase its sales during China's second largest online shopping event of the year, typically held from late May to mid-June. The company has not provided any comments on this matter.
The "618" shopping festival, initiated by e-commerce company JD.com in 2008, is second only to Singles Day, which was established by Alibaba in 2009.
McDonald's opened its first restaurant in Shenzhen in 1990.
McDonald's opened its first restaurant in Shenzhen in 1990.
Paul Lakatos/South China Morning Post/Gety Images
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Today, festivals like Singles' Day exceed Black Friday and Cyber Monday in total sales. Major Chinese e-commerce sites and physical stores offer weeks of promotions to attract customers. Even celebrities participate in the festivities.
Rihanna made an appearance in Shanghai on Tuesday, where she cooked a popular Chinese breakfast crepe and hosted livestream sessions to showcase her Fenty Beauty products on Douyin, the Chinese version of TikTok.
Apple has been reducing prices of its iPhone 15 models and iPads in China since October. This month, the discounts offered are the largest ever seen in the company's biggest overseas market, as reported by Chinese state media.
The JD.com Inc. headquarters during a ceremony marking company's 20th anniversary and 618 shopping event in Beijing, China, on Sunday, June 18, 2023.
The JD.com Inc. headquarters during a ceremony marking company's 20th anniversary and 618 shopping event in Beijing, China, on Sunday, June 18, 2023.
Bloomberg/Getty Images
“Apple needs to aggressively defend market share [in China],” said Jefferies analysts in a note on Tuesday.
Apple's market share in China dropped to 15.7% in the first quarter of this year from 19.7% last year, as reported by Counterpoint Research. On the other hand, Huawei experienced a 70% increase in sales, narrowing the gap with Apple.
Following the recent price cuts on Monday, the iPhone 15 from Apple is now priced similarly to smartphones from Xiaomi and Huawei in the market.
Boycotting the price war
Smartphone makers aren’t the only companies waging a price war in China.
Big discounts are now being offered in almost every sector, from food and clothing to consumer electronics and cars, showing a significant change in consumption patterns in the country.
The 618 shopping festival, which is a key indicator of consumption in the country, is experiencing increased competition among e-commerce sites and retail brands to provide discounts.
Some companies are choosing to boycott the event due to intense price competition. Over 50 book sellers released a joint statement on Monday, announcing their decision to not take part in this year's shopping festival. They cited the aggressive pricing policies of JD.com, which demanded discounts of 20% to 30% as the reason for their boycott.
Ten publishing houses in Beijing released a statement, stating that the boycott was essential to uphold the stability and prosperity of the book publishing market.
On the other hand, 46 companies in Shanghai expressed their opposition towards chaotic competition in the market.
Even big publishing companies owned by the government spoke out against the "chaotic" price wars.
A branch of Shanghai Century Publishing expressed their desire for a stronger pushback against the disorder caused by constant discounts. They made this statement on Monday through their official account on Xiaohongshu, a social platform similar to Instagram.
CNN’s Stephy Chung and Hassan Tayir contributed to reporting.
Editor's P/S:
The article exposes the intense price war in China, with Apple leading the charge by offering significant discounts on its products during the "618" shopping festival. This move is a response to increasing competition from Chinese smartphone manufacturers like Huawei and Vivo, as well as a decline in Apple's market share in the country. The discounts offered by Apple are the largest ever seen in its biggest overseas market, indicating the company's aggressive strategy to defend its position.
The price war extends beyond the smartphone sector, with big discounts being offered in various industries, reflecting a significant change in consumption patterns in China. However, some companies are boycotting the "618" shopping festival due to the intense price competition, highlighting the challenges faced by businesses in navigating the changing market dynamics.
