Customers in China are able to pre-order iPhone 6 and 6 plus on Apple Online Store, started from 12 a.m. GMT+8, Oct. 10. The delayed launch of the new iPhone also marked a beginning in downside of margins, said Chinese black market traders.
iPhone 6 and 6 plus now available for pre-order on Apple Store in China. (Shuang Li/Neon Tommy).
Jie Ba is the owner of Haiwentongxin, an online store that sells iPhone 6 and 6 plus on Taobao, China’s largest online e-commerce site. He complained that his iPhones are loosing value on the trip from abroad to China. “This is a business that races against time,” Ba said.
The iPhone black market in China can be traced back to the years of iPhone 3. “It has grown so popular in recent years that people almost forget that it’s illegal,” said Jinwei Zhang, a lawyer from Junze Law Offices in Beijing. According to customs law of China, without Customs approval and payment of duties, selling goods imported shall constitute a crime of smuggling. The criminal punishments imposed to persons guilty of smuggling include imposing a fine and confiscation of the smuggled goods.
According to statistics on its site, Haiwentongxin sold a total number of 1,280 iPhone 6 during the past month. The store is ranked as the second most popular store that sell the new iPhone among others on Taobao.
On Sep. 30, China’s Ministry of Industry and Information Technology updated on its website that iPhone 6 and 6 plus got approved on the country’s wireless networks. Several hours later on the same day, Apple sent a press release and announced that the new iPhone would be available in China beginning Oct. 17.
iPhone 6 comes in China for a suggested retail price of 5288 RMB ($863) for 16GB version, said Apple in their press release. While the selling price for 16GB iPhone 6 in China’s black market was much higher. For Haiwentongxin, they marked the price at 6000 RMB ($979) on Sep. 30.
On Oct. 10, Jie Ba decided to lower the price for 16GB iPhone 6 to 5268 RMB ($859), several dollars cheaper than Apple’s retail price. “He had no choice because we are already loosing customers,” said Wen Wen, who works as a customer service consultant. Wen said he used to work from 8:30 a.m. to 1 a.m. on the next day, with barely any time to take a rest. But recently, his work has become much easier, with fewer people consulting buying a new iPhone.
Yi Wang is a 22-year-old Chinese student studying at the University of Southern California. She lined up for 14 hours outside Apple Store at The Grove on Sep. 20, the first day iPhone 6 launched. Wang bought herself a space gray 64GB iPhone 6 and was considering buying more and reselling them back to China.
Yi Wang(the left one), is taking a selfie with her roommate using her iPhone 6 (Shuang Li/Neon Tommy).
“I got lot of people asking me for price. But I found them all ended up buying from resellers in Hong Kong.” Wang said with all the taxes and postal rates she needs to pay, there was no way for her to offer a lower price than her competitors in Hong Kong. “And Hong Kong is located nearer to the Mainland, you know how people want to get their new phones as soon as possible,” said Wang.
As the main source of the iPhone 6 and 6 plus in the Chinese black market, Hong Kong has a more crucial advantage that attracts traders from the Mainland China. According to Wen Wen, the consultant at Haiwentongxin, Apple Stores in the Mainland only allow customers to get service for their iPhone that was purchased in Hong Kong.
Wen Wen’s employer Jie Ba said that at least 75 percent of the iPhones in his store come from Hong Kong. He almost only purchases gold iPhones from other markets because the version is so popular in China that it quickly sold out.
Jie Ba said he’s expecting the black market prices of iPhone 6 and 6 plus go even lower. Especially after Oct. 17 when the new phones will be available for customers to pick up at any Apple Store. “But there will still be chances for us to make money, I know there always is.”