With the Double Eleven e-commerce promotion in full swing, major platforms are busily preparing for promotional activities, including Apple. However, Apple suddenly pressed the pause button on channel control. According to Apple's latest financial report, revenue in Greater China was $14.493 billion, a year-on-year decrease of 3.6%, making it the only market in the world where Apple experienced a decline.
Multiple media outlets have confirmed that Apple China has issued a channel control notice to its authorized offline resellers, strictly prohibiting cooperation with any e-commerce platforms and banning the display, promotion, or sale of Apple products on online channels such as e-commerce, social media, and live streaming. Instant retail services such as hourly delivery and one-piece delivery are also included in the restrictions.
This unpublished notice includes strict penalties; violators will have their authorization revoked immediately and will be required to bear the costs of product destruction. On relevant social media platforms, distributors have already posted reports that some stores have had their authorization revoked by the manufacturer due to violations. Some distributor managers have also told the media that this move may raise legal concerns, further escalating the already complex competition among distributors for Singles' Day.
Channel competition intensifies
Behind channel control lies a long-term struggle between brand pricing logic and e-commerce platform models.
As early as the iPhone 11 sales cycle, Apple explicitly prohibited Team 1 level core distributors from supplying goods to certain e-commerce platforms. Chen Qian (pseudonym), a distributor in Shenzhen, also revealed in an interview that this "sales ban" had actually been in place for some time, but this time it was "more severe." "During the iPhone 12 era, Apple also blocked distributors in Shenzhen, prohibiting them from supplying goods to multiple e-commerce platforms. The penalties at that time were quite severe. Many merchants in Shenzhen's Yuanwang Digital City probably still remember it vividly."
While e-commerce platforms may appear to be operating at a loss, they actually cover costs through platform subsidies, thereby gaining massive traffic and sales while allowing more consumers to access Apple products at a lower barrier to entry, especially users in lower-tier markets, who can enjoy products that were originally priced higher at more affordable prices.
However, Apple's stance against this model is very clear. Each iPhone has a unique barcode that allows Apple to trace its origin, enabling it to accurately identify suppliers that have leaked into unauthorized channels. Once a violation is verified, older models will be fined 130% of the official price, while newer models will be fined up to 200,000 yuan per unit.
This is essentially no different from the logic behind previous disputes between brands and online channels.
The difference between the two is essentially an objective clash of different business logics.
Apple relies on a mature reseller network to maintain price stability. Team 1 distributors purchase the goods at 85% to 90% of the retail price and then resell them to JD.com. Downstream channels such as Suning then balance market supply and demand by adjusting regional allocation ratios and controlling shipment pace to avoid significant price fluctuations.
The core advantage of e-commerce platforms lies in breaking geographical restrictions and achieving price transparency through technological means, allowing consumers to quickly compare prices across different channels. This low-price strategy is not only a means of attracting users, but also a natural result of the platform's improved supply chain efficiency through centralized procurement, optimized logistics, and reduction of intermediate links.
Chen Qian was also puzzled by Apple's actions. "Having worked with Apple phones for so many years, I can clearly feel that the number of die-hard 'Apple fans' is decreasing. Product performance and cost-effectiveness are now the considerations for more consumers. Under this logic, Apple's actions seem to be putting the cart before the horse." He also questioned, "As the dominant party, Apple cannot restrict competition and maintain high prices simply by claiming to maintain channel order. Demanding that distributors not sell on e-commerce platforms and restricting their trading partners without a legitimate reason may also raise legal issues."
A-Jun (pseudonym), a merchant who has been trading secondhand mobile phones in Shenzhen Yuanwang Digital City for many years, expressed the same view: "Online channels are definitely the key to sales during the Double 11 promotion every year, which can increase sales by at least 30% compared to usual." As a link in the chain, he can also clearly feel that the secondhand Apple mobile phone sales market has been affected by Apple's increasingly strict control in the past two years.
This contradiction is not unique to Apple, but is a common phenomenon throughout the entire consumer sector.
Zhongguancun The rise and fall of online marketplaces is a vivid microcosm of this phenomenon. The price transparency brought about by e-commerce has narrowed the price difference between physical stores and wholesale markets. While this has forced traditional distributors who rely on information asymmetry to transform their businesses, it has also freed consumers from the price chaos of offline marketplaces, allowing them to enjoy a fairer trading environment. At the same time, it has forced the entire industry to improve its circulation efficiency.
Apple's ban on online sales during the Singles' Day promotion hurts consumers.
Brands' price control measures have their market considerations, but the e-commerce platform model is not meant to disrupt price order. How consumers can truly benefit is also the key to market competition.
A Zhao, a former staunch Apple fan, said that he bought an iPad on an e-commerce platform last year, and after various discounts, it was 1,200 yuan cheaper than the official channel. "It's not that the offline shopping experience is bad, but in recent years, domestic consumers' shopping habits have been cultivated. They compare prices on various platforms and choose the one with the best cost performance. As consumers, we just hope to try our best to keep our wallets from getting hurt."
Xiao Sun, who originally planned to take advantage of the Double 11 promotion to buy an Apple phone, frankly said: "Apple's strength is not because it's expensive, but because of its product power. If they keep doing this now, I'll have to consider what phone to get."
The core of brands' strict control over channels is to curb the disruption of market order caused by reselling. The Chinese market is vast and has diverse consumer levels. The traditional distribution system has continued from the era of feature phones to the present day, helping brands achieve wide product coverage and orderly circulation through regional agents and tiered distribution models.
In the early years, the circulation of grey market iPhones did indeed cause market chaos. New models were often not launched in mainland China, and dealers imported grey market iPhones through methods such as personal smuggling and unofficial customs declarations. Hong Kong versions were priced 600 to 800 yuan lower than official versions, while rare models, such as the first batch of Japanese iPhone 4S, could be priced as much as 10,000 yuan higher than the official price.
This arbitrage not only disrupts the brand's pricing system but also leaves consumers facing problems such as difficulty in distinguishing genuine products from counterfeit ones and lack of after-sales support. However, the emergence of e-commerce platforms, through the centralized supply of legitimate sources and the after-sales guarantees backed by the platforms, has gradually squeezed out the space for smuggled goods, making market circulation more standardized. This aligns perfectly with the brand's desire to maintain market order.
The subsidy model of e-commerce does not create new arbitrage opportunities, but rather directly reflects the improvement of supply chain efficiency.
The platform reduces procurement costs through centralized purchasing, minimizes transportation losses by leveraging a nationwide logistics network, and utilizes big data. Optimizing inventory turnover and other measures are constantly reducing redundant costs in the distribution process, essentially passing on some of the cost savings to consumers.
This model not only meets the price-sensitive needs of users in lower-tier markets and promotes the popularization of products such as smartphones, but also forces brands to optimize their channel efficiency, reduce unnecessary intermediary markups, and ultimately enhance the competitiveness of the entire industry. The shift of some distributors from offline to e-commerce platforms, seemingly contrary to brand control, actually reflects the market's demand for more efficient distribution channels and is a result of commercial principles.
Moreover, e-commerce platforms have generally established comprehensive after-sales guarantee systems, such as seven-day no-reason return and exchange, door-to-door pickup for quality issues, and platform advance compensation, so that low-priced products can also have reliable consumer protection, rather than the lack of after-sales service that brands worry about.
Meanwhile, the increased price transparency in e-commerce is forcing brands to improve the cost-effectiveness of their products, avoiding long-term reliance on brand premiums while neglecting consumers' real needs. In the competitive environment of e-commerce platforms, consumer reviews and feedback can spread rapidly. If brands want to maintain their market share, they not only need to maintain brand value, but also need to align product innovation, feature upgrades, and pricing with consumer demands.
This market pressure has driven brands to continuously optimize their product portfolios and launch products at more price points to meet the needs of different consumer groups. This is also an important contribution of e-commerce to the healthy development of the industry.
In addition, e-commerce platforms can provide brands with broader market reach channels, especially in lower-tier markets and among young consumers.
Traditional distributor systems are limited by geographical and cost constraints, making it difficult to cover third- and fourth-tier cities and rural markets. In contrast, e-commerce platforms have achieved nationwide logistics coverage, enabling brands to reach these potential users at a lower cost.
Data shows that smartphone penetration in lower-tier markets has been increasing in recent years, and e-commerce platforms are a key driving force behind this trend, helping brands explore new growth opportunities, which is perfectly aligned with brands' goal of expanding market share.
Therefore, the relationship between brands and e-commerce is not a zero-sum game; a positive collaboration between the two parties will help achieve a win-win situation.
Apple relies on its reseller network for nationwide product distribution and offline services, while e-commerce platforms help the brand reach a wider consumer base, increasing product sales and market penetration. Reasonable price control and appropriate platform partnerships can both maintain the brand's pricing structure and brand value, and leverage the channel and efficiency advantages of e-commerce.
As the biggest e-commerce promotion event of the year, Singles' Day has amplified the contradictions between the two, but it has also provided an opportunity to reach a consensus.
Brands don't need to completely ban online sales; they can regulate channels through tiered authorization, joint pricing, and the parallel operation of official flagship stores and authorized franchise stores. E-commerce platforms can also establish deeper sourcing partnerships with brands while providing subsidies, ensuring products are obtained through legitimate channels and avoiding the risks of violations.
The value of e-commerce platforms lies not in disrupting the price system, but in promoting a more efficient, fair, and inclusive market, which is not contrary to the goal of brands in maintaining market order.
Looking ahead, finding a balance between protecting brand value, channel profits, and meeting consumers' demand for low prices will remain a common challenge for the industry. (By Qin Ming)
(Article source: 21st Century Business Herald)
