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Apple now giving interest-free loans in China to sell iPhones

Apple has joined forces with Alipay, a Chinese mobile payments firm, to offer interest-free loans to Chinese consumers in an effort to boost sales in that country.

According to a Wall Street Journal report, the two firms told prospective buyers about the new deal this week. To qualify, they have to buy products worth more than $595. This will make it possible for more people to buy Apple’s latest iPhone devices, including the cheapest model, the iPhone XR.

Apple investors have been worried about the lack of sales growth in China after CEO Tim Cook last month cautioned about slowing iPhone sales because of “economic pressures” in that region. Apple reported a drop of close to $5bn in sales revenue from China during its first quarter this year.

In an interview with CNBC, Cook explained that the shortfall could be primarily attributed to slowing iPhone sales in China. He added: “It’s clear that the economy began to slow there for the second half and what I believe to be the case is the trade tensions between the United States and China put additional pressure on their economy.”



In the interview, Cook also discussed adding different payment options. Working with Alipay is interesting because Apple Pay failed to make a dent in that market. Alipay, on the other hand, has over 700 million active users in that part of the world.

Alipay will finance Apple transactions in the region via its Huabei service, which works like a virtual credit card. Apple will most likely have to give up a percentage of the product’s price upfront.

In the past, Alipay only offered interest-free loans to buy Apple products for 12 months. According to the Wall Street Journal, the new 24-month option will run until 25 March.

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Chris

I've been a passionate evangelist for Apple and the Macintosh throughout my working life, my first love was a Quadra 605 working with a small creative agency in the south of Norfolk UK in the mid 1990's, I later progressed to other roles in other Macintosh dominated industries, first as a Senior graphic designer at a small printing company and then a production manager at Guardian Media Group. As the publishing and printing sector wained I moved into Internet Marketing and in 2006 co-founded blurtit.com which grew to become one the top 200 visited sites in the US (according to Quantcast), at its peak receiving over 15 million visits per month. For the last ten years I have worked as an Affiliate and Consultant to many different business and start ups, my key skill set being online marketing, on page monetisation, landing page optimisation and traffic generation, if you would like to hire me or discuss your current project please reach out to me here.

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