BEIJING—Chinese authorities in the southwestern city of Kunming have launched a sweeping investigation of electronics stores after media reports said one retail outlet seemed to be copying Apple Inc.'s store format.
The inspection will cover business licenses, authorized permits of brand use, and the purchasing channels of each store, said China's state-run Xinhua news agency, citing a worker with the city's industrial and commercial department.
Results of the inspection will be announced to the public soon, the report said. Kunming municipal government officials couldn't be reached for comment.
The inspections, initiated Friday, follow media attention last week centered on a Kunming store that appeared to be nearly identical to Apple's highly stylized Apple Stores, including a winding staircase, blue employee T-shirts and name tags with Apple logos.
The store, which was photographed by an expatriate blogger who uses the handle BirdAbroad, has a sign identifying it as an Apple Store—a term trademarked by Apple—but is neither an Apple Store nor an Apple authorized reseller, according to store employees and an Apple list of its retail outlets.
The Kunming store's manager, who gave only his surname Li, said by telephone Sunday that city officials visited the store Saturday and Sunday to check its products, and said it wasn't in violation of the law.
He said the officials were to make a declaration about the store's legal status by next week.
It is unclear whether the inspections were prompted by complaints from Cupertino, Calif.-based Apple, which is in the midst of an aggressive expansion of its own Apple Stores in China, the world's largest mobile market and No. 2 personal-computer market after the U.S.
Apple has opened four of its Apple Stores in China—two in Beijing and two in Shanghai—and expects to open another in Shanghai soon.
Here's the Fake Apple Store in Kunming, China:
Here's the real Apple Store located in Pudong, China.
An Apple spokeswoman declined to comment.
Apple hasn't yet announced plans to open in other Chinese cities, though its next target is unlikely to be Kunming, which is smaller and far less wealthy than Beijing and Shanghai.
Apple relies on a network of authorized resellers around China to sell its products. They design their stores, including the use of Apple's logos, according to guidelines from Apple.
But Apple products are also sold by thousands of unauthorized resellers, some of which buy the products directly from Apple Stores in China or from other regions, then resell them at a markup.
It isn't illegal to resell genuine Apple merchandise.
Many resellers around China and elsewhere borrow from Apple's bright, minimalist design, but few have done so to the degree of the store in Kunming.
Mr. Li said his store isn't an authorized reseller of Apple, but hopes to be one. Mr. Li, added that the store's prices match prices on Apple's Chinese website.
"We never claimed to be Apple's authorized reseller, but we have a business license and we are running our business by law. All of our products are authentic Apple products."
He declined to say where the company buys its merchandise, and said he isn't sure whether the store's owners have initiated the process required by Apple in order to become an authorized reseller, but added,
"I am sure we will become their authorized reseller in the near future. After all, we invested a lot in this store."
COMMENTARY: I like the spirit of entrepreneurship displayed by Mr. Li. Jobs should grant him his wish of becoming an authorized Apple reseller. Let's end this charade. So what if Mr. Li sells a few iPhones and iPads. That won't even put a dent in Apple's financials. So long as Mr. Li provides genuine Apple products, and doing so in a professional manner consistent with established Apple procedures and policies, I don't see the problem, do you? Don't worry Mr. Li, I just wrote Steve Jobs a letter.
Courtesy of an article dated July 25, 2011 appearing in The Wall Street Journal
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