Apple has recently launched its online store in Vietnam, further demonstrating its recognition of the growing importance of emerging markets for the tech giant. Following the notable debut of its first physical shops in India, this move allows consumers in Vietnam, a fast-growing Southeast Asian economy, to directly purchase any Apple product for the first time.
As Apple’s growth in developed markets, including China, slows down, the company has been increasingly focusing on emerging markets like Vietnam, India, and Indonesia. These regions are becoming vital for Apple’s expansion, prompting the company to invest in areas where it has traditionally had a less significant presence.
While China played a central role in Apple’s phenomenal rise to become the world’s most valuable company, both in terms of production and consumption, the tech giant is now diversifying its strategy. Apple CEO Tim Cook has emphasized the promising prospects of emerging economies, referring to them as bright spots in the company’s financial results. During an earnings call, Cook highlighted the impressive performance in markets such as Mexico, Indonesia, the Philippines, Saudi Arabia, Turkey, the UAE, Brazil, Malaysia, and India.
Daniel Ives, the managing director of Wedbush Securities, noted that as global growth has slowed, Apple is under increased pressure to aggressively pursue emerging markets. Ives predicts that countries like Indonesia, Malaysia, and India will become more significant contributors to Apple’s success in the coming years, thanks to the company’s focused efforts in these regions.
The launch of an online store often precedes the establishment of brick-and-mortar Apple stores, as seen in India where physical outlets were introduced last month. This approach allows Apple to solidify its presence in emerging markets. Chiew Le Xuan, a research analyst covering smartphones in Southeast Asia for Canalys, described Apple’s recent moves as “further cementing” its position in these markets. The company has been actively expanding its distribution network and authorized reseller channels, particularly in Malaysia.
However, there is still substantial room for growth in these markets. Canalys reports that Apple currently operates its own stores only in more developed regional economies like Thailand and Singapore. Even in Indonesia, the world’s sixth-largest smartphone market, Apple does not yet have a physical store, and its market share remains small at just 1% in 2022.
The rising middle class in Southeast Asia presents significant opportunities for Apple. The number of middle-income and affluent households in countries such as Vietnam, Indonesia, and the Philippines is projected to grow by approximately 5% annually through 2030, according to the Boston Consulting Group. This consumer base has been identified as the next mega-market, attracting global businesses like Apple to invest in the region.
However, premium brands like Apple have faced challenges in emerging markets due to the higher price points of their products. Typically, these markets rely on local resellers, and affordable smartphones priced below $200 dominate the majority of shipments. Apple’s absence in certain countries, such as Cambodia or Vietnam, has been evident during new iPhone launches when buyers from these regions often travel to nearby countries like Singapore or Malaysia to purchase devices for resale.
Nonetheless, as Apple continues to increase its presence in Southeast Asia, this dynamic could change. By employing strategies similar to those used in China, Apple could expand its ecosystem and capture a larger market share through various pricing strategies and building customer loyalty.
While there may be regulatory hurdles and pricing challenges to navigate, Apple’s expansion into emerging markets, including Vietnam, signals a golden opportunity for the tech giant. With its established brand and loyal customer base, Apple is well-positioned to tap into the rising affluence of Southeast Asia’s middle class and establish a stronger foothold.