According to Analysys International, a Beijing-based research firm, nearly half (49 percent) of all iPads sold in China are being sold in grey markets. This means that someone buys the devices in another country, then resells them locally in China. According to Macworld the reason Chinese consumers are still flocking to un-authorized resellers is that Apple only recently made the iPad 3G available in China in September, and there seems to still be a backlog of available devices for purchase.
With some customers having to wait months for their devices, it makes sense that they would turn to other, less official means of obtaining iPads and iPhones. We can’t really blame them either. Getting our hands on the new iPhone 4S is a priority. We need it now, and we’ll do anything to get our hands on one for coverage sake.
Another contributing factor is the price of the devices within China and other countries that don’t have very favourable exchange rates. For a while the cost of any Apple product in Canada carried an additional price tag that went above and beyond the current exchange rates, and it was cheaper to cross the border into the U.S. to pick up your devices. I’ve never actually jumped the border to make a purchase, but it’s certainly crossed my mind from time to time. Thankfully Apple recently changed their prices in Canada to be a lot closer to par on a dollar to dollar basis.
But, the price differences in China far surpass the differences in a western country like Canada. In China, the iPad 2 will cost the equivalent of $990 for the 64 GB version of the device. That’s quite a bit more than the $829 it costs in the U.S. The extra wait and added costs of purchasing your products in China is a clear recipe for grey markets, especially in the globalized world we live in where international shipping is relatively cheap.
Apple may not like that people are re-selling their devices, but there isn’t much they can do about it. So long as the price disparity exists, and there are people willing to buy cheap and sell a bit higher, grey markets will continue to exist.