In a first, Apple closes store in China amid country’s declining consumer spending

In a surprising development, Apple is preparing to close its retail store in China for the first time, a significant move in one of its most critical markets.

On Monday (July 28), the tech giant announced that its Parkland Mall store in Dalian City’s Zhongshan District will permanently shut its doors on August 9, citing changes in the shopping complex’s environment.

This closure marks a pivotal moment for Apple as it faces an increasingly complex economic landscape in China.

Apple currently operates around 56 stores in China, representing over 10 per cent of its global retail network of more than 530 outlets.

The decision to close the Parkland Mall location comes as the company observes a broader trend of retailers exiting the complex.

In its statement, Apple highlighted its ongoing commitment to delivering “an exceptional customer experience” through its extensive network of physical stores across Greater China and its robust online platform.

Apple feels the heat as retail sales weaken

China’s economy is currently grappling with deflationary pressures, declining consumer spending, and global tariffs that are impacting exports.

Retail sales growth in the country has been weaker than expected, and home prices are falling at an accelerated pace.

Against this backdrop, Apple’s sales in China for the second quarter dropped 2.3 per cent to $16 billion, missing earlier projections of $16.8 billion.

The Parkland Mall store is one of two Apple locations in Dalian City, with the other at the Olympia 66 shopping complex remaining open. The two stores are just a 10-minute drive apart, and Apple has assured employees affected by the closure that they will be offered opportunities to transfer to other locations.

Apple not retreating

While the closure reflects challenges in the Chinese market, Apple is not retreating entirely. The company is set to open a new store at Uniwalk Qianhai in Shenzhen on August 16 and has plans to expand with additional locations in Beijing and Shanghai over the next year.

Earlier this year, Apple also opened a new store in Anhui province.

Apple eyes other major markets for growth

Beyond China, Apple is eyeing growth in other international markets, including the United Arab Emirates, Saudi Arabia, and India.

The company’s focus on India has been particularly notable. According to research firm Canalys, India surpassed China as the top supplier of smartphones to the US in the June quarter, largely driven by Apple’s accelerated shift of iPhone assembly operations to India.

This move comes amid trade and tariff uncertainties, as well as ongoing negotiations between Washington and Beijing.

Canalys reported that the share of made-in-China smartphones imported to the US dropped significantly to 25 per cent in the June quarter, down from 61% a year earlier, with India capturing much of the redirected production.

Apple’s “China Plus One” strategy has gained momentum, with the company now manufacturing and exporting even its more complex Pro models from India. However, Apple continues to rely on Chinese manufacturers for a significant portion of its Pro model supply to the US.