The stores were allegedly not in trouble for copyright infringement, but only because they did not have the proper business licenses, according to Reuters. Three other counterfeit Apple stores that operate without Apple's authorization remain in Kunming.
The city's investigation was prompted by Internet attention that began last week, when it was revealed that knock-off Apple retail stores even feature employees wearing blue t-shirts, just like a real Apple Store. Officials in Kunming reportedly verified that the five self-branded "Apple Stores" sold official Apple products without the Cupertino, Calif., company's authorization.
A spokesman for the city's government said they went to "great steps" to ensure that the stores were not selling counterfeit Apple products. They also said they are investigating whether Apple applied with the Chinese government to have the design of its stores protected by law.
The report noted that Chinese law does prohibit companies from copying the "look and feel" of other retail stores, but added that enforcement and trademark protection in China are "often spotty." While piracy is a known rampant problem in China, the idea of a counterfeit store — one so believable that some employees believe they actually work for Apple — is new.
After the news broke, some customers began returning to the counterfeit Apple stores with their recent purchases, demanding proof that the products are genuine and not knock-offs. The city's investigation reportedly found that all five Apple stores in Kunming sell genuine Apple products bought from other authorized resellers.
There are a total of just four official Apple retail stores in China, but the company plans to open a total of 25 in the next few years. The company has focused its efforts on the region, growing its Greater China revenues — which include Hong Kong and Taiwan — to $3.8 billion in the June quarter, a massive six-fold increase.