Technology
Apple buys China market share with no-interest loans, assumes risk
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From “Apple to Chinese Consumers: Buy a New iPhone for Under $30 a Month, Interest Free” in Friday’s Wall Street Journal ($):
Apple, hoping to revitalize sales in China, has paired up with the world’s largest financial-technology company to give iPhone buyers an affordable purchase option: up to two years of interest-free financing.
Apple and Alipay, a popular Chinese mobile-payments network owned by Jack Ma’s Ant Financial Services Group, this week informed customers that they could borrow money at no cost to buy products on Apple’s online store and pay for the devices in monthly installments over 24 months…
Huabei, which means “just spend” in Chinese, on Wednesday told customers that it could temporarily increase their credit limits to enable them to purchase Apple products.
While such loans are interest-free for shoppers and can spur them to make big-ticket purchases, retailers are in effect footing the financing costs.
My take: The risks are real. Last I heard, China had $34 trillion in private and public debt. See China’s Debt Bomb.
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