Apple Closes Flagship Store in China Amidst Market Erosion

Apple is closing its flagship store in Dalian, China, due to the departure of many retailers in the shopping center. This move comes amid a contraction in China's smartphone market, with domestic brands like Huawei, Xiaomi, and Vivo eroding iPhone market share. The closure of the Apple store is seen as a sign of retreat from the Chinese market.

Apple Inc. (AAPL) has announced the closure of its flagship store in Dalian, China, marking the first retail withdrawal by the company in the country. The decision comes amidst a broader recalibration strategy by Apple to address waning Chinese consumer demand and global macroeconomic headwinds [1].

The store, located in the Parkland Mall in Dalian City, will close on August 9, 2025. This move follows the departure of several retailers, including luxury brands like Michael Kors, Armani, Coach, and Hugo Boss, from the mall due to a slump in Chinese consumer spending [2]. Apple will continue to operate its second store in Dalian, located at the Olympia 66 shopping mall, and plans to open a new store in Shenzhen this month [1].

The closure is part of a broader shift in Apple's retail strategy. Despite the closure, Apple continues to expand globally, opening new locations in Detroit, Riyadh, Osaka, and Miami. However, unresolved legal issues from past China disclosures still weigh heavily on the company. Apple has agreed to settle a class action lawsuit for $490 million to resolve claims stemming from CEO Tim Cook's 2018 statements and subsequent sales disclosures [1].

China's smartphone market has been experiencing a slowdown, with domestic brands like Huawei, Xiaomi, and Vivo eroding Apple's market share. Apple reported a 2.3% year-over-year decline in China revenue to $16 billion in the second quarter of 2025, missing estimates [1]. The company's market share in China fell to 15.5% last year, down from 17.9% the previous year [2].

While the closure of the Dalian store is seen as a sign of retreat from the Chinese market, Apple remains committed to its global expansion. The company aims to finish the year with 58 stores in China, the same number it had at the start of the year [2]. The settlement of the class action lawsuit underscores the reputational and financial risks of opaque disclosures in Apple's largest overseas market.

References:
[1] https://www.tradingview.com/news/11thestate:4c48a679a094b:0-aapl-shifts-china-retail-strategy-but-490m-legal-payout-still-casts-shadow/
[2] https://www.newsbreak.com/new-york-post-509648/4143116396554-apple-shutters-store-in-china-for-first-time-ever-as-struggles-mount-in-second-largest-market