Buying iPhone 6
With the release of the new iPhone 6 and iPhone 6+, Apple fans all over the world are ped up and trying to get the phone as soon as they can. Even though smartphones are considered as a luxury good that people don’t necessarily need, its price is highly inelastic for the first few week of release. People would pay enormous amount of money to purchase the iPhones in order to get it before anyone else.
https://www.youtube.com/watch?v=Ef_BznBwktw&list=UUtinbF-Q-fVthA0qrFQTgXQ
The striving “personal buyers” are very popular career in China, and their main job is to post pictures of product through a popular social media app called “Wechat” , then sell the item to customers who replied their post. Wechat is different from other social medias because their main users are around age 30-50, and those people generally have very high purchase power. Because of the popularity of personal trades through social media, its easy for people to buy and resell and a higher price. In New York Apple Store, people discover that many chinese “tourists” were lining up not to buy an Iphone for themselves, but to smuggle the phone back to china and sell it for double its price. Due to the extremely high demand in China for the new iPhone, one normal iPhone 6 16GB can be sold around $1,430 which is seven times the price you can get for its carrier contract ($199). The supply for apple is definitely enough, but the operations process to distribute is unimaginably slow. It usually takes more than 2 weeks to pre-ordered phone , and if people want to get it the first day they have to wait for more than 2 days camping on the streets. If people want to get their own iPhone, they need to find another way to purchase it, thats where the black markets comes in. For each phone, the black market organization make almost double the revenue, and smuggle iPhone back to China, even though illegal, is highly profitable and creates enormous economic profit for the organization.
I personally ordered a phone through online service and I am still waiting for it. Should I buy it from the smuggler too?
Source: http://www.washingtonpost.com/blogs/worldviews/wp/2014/09/22/iphone-6s-being-sold-for-insane-amounts-of-money-in-china/