China's overcrowded consumer electronics market will get yet a new dose of competition when U.S. retailer BestBuy opens its first outlet in China, likely by year-end.
BestBuy Co. is teaming up with local partner Jiangsu Five Star Appliance Co., China's No. 4 appliance and consumer electronics retailer, in opening a store in Shanghai's busy Xujiahui shopping district.
"We will open the first store hopefully toward the end of the year by December," Robert Willett, chief executive officer of a BestBuy unit called BestBuy International, told reporters on Aug 29.
"But we're only going to open when it's right," he said. "This is not a race."
BestBuy, the biggest U.S. consumer electronics retailer, is only one of scores of foreign retailers taking advantage of a lifting of limits on foreign competition to try to woo consumers in the world's biggest potential market.
Despite intense local competition in the lower segments of the market, foreign brands dominate in malls and shopping centers aimed at the country's fast-growing middle class, who are able and willing to pay a bit more for better service and quality.
BestBuy, based in Richfield, Minn., announced in May that it paid $180 million for a majority stake in Jiangsu Five Star, giving it an immediate presence in Asia's fastest growing market.
China is also one of Asia's most saturated markets, where appliance retailers and manufacturers compete amid brutal price wars and rampant piracy of technology and brand names.
And as foreign retailers like BestBuy and Wal-Mart Stores Inc. make inroads into their home territory, local retailers are fighting back. China's No. 1 consumer electronics retailer, Gome Electrical Appliances Holding Ltd. made an offer in July to buy Hong Kong-listed China Paradise Electronics Retail Ltd., the country's third largest seller of electric appliances.
BestBuy is concentrating on researching the market and recruiting and training staff before making its next move in China.
"We are still learning about this marketplace," Willett said. "The Chinese consumer is pretty unforgiving if we get it wrong."
Market research shows Chinese consumers are spoiled for choice, facing a bewildering array of products in almost every area.
But appliance outlets are often dingy, smoke-filled malls with dusty displays chock-a-block with substandard products. And free after-service or installation is virtually nonexistent.
Willett hopes BestBuy will win over picky Chinese customers with pleasant outlets and helpful, dependable service.
"BestBuy is very much about service," he said. "When we sell something we make you a promise that it will work, we'll warrantee it and teach you how it works."
The company is not alone in attempting to win an edge over local competitors with a more positive shopping experience. In July, Motorola Inc. opened a slick new flagship store, in the same building in Xujiahui where BestBuy's outlet will be, where shoppers can try out all features and accessories on its cell phones and other products — not an option in the typical Chinese electronics bazaar.
Source:佚名