Skip to comments.Apple a Consumer Credit “Pioneer” in China With New Payment Plan
Posted on 01/26/2013 10:58:24 PM PST by ExxonPatrolUs
Apple has partnered with China Merchants Bank to offer Chinese customers affordable payment plans for purchases made at the Apple Store, Bloomberg reported Wednesday. Although the country has a fast-moving economy, Apples premium-priced products remain out of reach for many potential Chinese customers, and Apple hopes that simple payment plans, still a novel concept in the country, will help reach a new demographic of consumers.
Apple is known for its premium products that often hit the wallet harder than those from competing companies. In still-developing nations like China, however, this can severely limit Apples potential market. According to Bloomberg, the iPhone 5s starting price of 5,288 yuan (US$850) is equal to about six weeks pay for an average urban worker. Even worse, MacRumors points out that the junior level workers who manufacture most of Apples products only make about 1,800 yuan (US$285) per month, putting purchases of the products they make out of reach.
There is an enormous mid-range consumer market that they are not tapping into, Mark Natkin, managing director of Marbridge Consulting Ltd., a Beijing-based market research firm, told Bloomberg. Theyre trying to figure out how to make products more accessible to that market segment. This is a good step in that direction.
Apple hopes to address this problem through a joint promotion with China Merchants Bank Co., which gives customers the option of splitting payments into 3, 6, 12, 18, or 24 installments. As an introductory offer, all payments with 12 or fewer installments are interest-free, and the 18 and 24 month installment plans carry an interest rate of 6.5 and 8.5 percent, respectively.
While installment payment plans are nothing new in most parts of the world Apple has long offered interest-free payment plans in the U.S. via a partnership with Barclaycard Apples introduction of the system to China is interesting in that it will be one of the few companies to directly market credit to its consumers.
"Financing is traditionally the best route to make expensive luxury items affordable to those unable to save the cash for them, and if Apple pulls it off it will be a pioneer in consumer credit in China, David Wolf, a managing director for market consultant firm Allison+Partners in Beijing, told Bloomberg.
China is a top priority for Apple, as recently revealed by the companys CEO Tim Cook; Mr. Cook expects the Chinese market to top the U.S. as the companys busiest and most important in the coming years. In a nation where the average monthly wage is 3,585 yuan (about US$575), however, only options such as this new payment plan will help expand Apples reach.
Keeping up with the Jones’ comes to China.
They should apply for obomaphones.
So factory worker makes 12 dollars a day. No wonder they are quiiting the factories. I read where they are having a hard time getting people to slave away 6 days a week those wages.
Now apple corp wants to screw them some more.
I have been pro corp all my life however they have taken on a life of their own and become as greedy and evil as the worse humans.
I was wrong about them and I was wrong in thinking that republican = conservative
That’s it! we’ll get back at the Chinese by introducing them to the concept of Consumer Debt! They’ll be ruined in 3 generations!