Best Buy leaves China in defeat
Stateside, Minnesota-based Best Buy has become the 800-pound gorilla of electronics retailing, but over in China, the company's big branded stores are extinct. It announced today that it was closing all nine of its outlets.
Wikipedia Best Buy's Shanghai store, above, is one of nine that closed up shop today.
Adam Minter, an American journalist who covers China for the western press, writes this morning that Best Buy failed to come to grips with the Chinese market in three ways: Failure to compete for the lowest prices; situating stores in urban areas that enable potential customers to vote with their feet; and applying the American-style attitudes about service to the Chinese market (i.e. price point beats all other considerations).
The company still has a foothold in China, however, having consummated a deal to buy that country's third-largest home appliance retailer, Five Star, in 2009. It plans to open 40 to 50 Five Star locations in growing Chinese markets in 2012, for a total of 210.
Meanwhile, about 150 more Best Buy Mobile small-format stores will open across the U.S. by the end of 2012, for a total of 325. And it's moving ahead with plans to open 18 stores in Canada, the United Kingdom and Mexico during 2012.
The company posted 2010 revenues of $49.694 billion -- a long way from that flagship store that opened in Burnsville in 1983.