Is Apple Inc. (AAPL) Taking This Advice In China? It Should

Apple Inc. (NASDAQ:AAPL) is hoping to do big things in the China smartphone market in the years to come. CEO Tim Cook has discussed this time and time again, and there is no reason to believe that things are changing right now. At this point, Cupertino still has a way to go (see why here) but the company is definitely moving in the right direction.

A recent report by Kantar Worldpanel and Bain & Company shares some information on what Apple Inc. (NASDAQ:AAPL) should be doing if it has hopes of making major strides in the Chinese market in the near future.

According to the company’s most recent report, China Shopper 2013, companies interested in building big brands in this country need to attract and recruit as many shoppers as possible. It goes on to add the following:

“Whereas shopper loyalty is somehow important in certain consumer goods categories, including infant formula and baby diapers, the report finds that market penetration—defined as the number of consumers who buy a specific brand at least once a year, divided by the size of the relevant market population—is the most important driver of market share.”

This may not be directly related to Apple, but it is something Cupertino should be considering nonetheless. It goes without saying that Apple Inc. (NASDAQ:AAPL)’s devices are not purchased as regularly as other goods, such as diapers, but the same general idea still applies.

Bruno Lannes, head of Bain’s Consumer Products Practice in China and co-author of the report added the following:

“Although Chinese shoppers buy multiple brands in every category, they do display very predictable buying patterns across all categories. As such, the Chinese shopper behavior is not different from shoppers in other parts of the world.”

Apple Inc. (NASDAQ:AAPL) has been successful in reaching new markets in the past, and likely has a solid plan in doing so in China in the future. This reports shows just one side of what Cupertino may be trying to accomplish.

Here is one last tidbit from the report:

“To grow, companies have to not only attract new shoppers each year, they also need to replace last year’s shoppers with new shoppers. This churn, according to Bain and Kantar, is why the most important factor to drive brand growth, across all categories, is to drive penetration.”

Apple is doing big things in China and will continue to forge ahead in this key market in the coming years.