Best Buy first stepped into Chinese market in 2006, after five years ‘survive’, it exited Chinese market without any provocation.
Back to 2010, I went to Shanghai and was actually shopping in one of Best Buy retail stores. And there were two the most famous retail outlets called Gome and Suning right close to it. Compared to those two local companies, Best Buy’s retail stores have better shopping environment where costumers are able to sit in the couch to play new released PlayStation or watch TV; meanwhile, it definitely has better service for customers, many professional technique assistants are available to customers. However, Best Buy focused on its high quality service instead of price of product, which is the most significant factor for most Chinese consumers. Three electronic retail stores offer pretty much the same product; there is no doubt that consumers would prefer to buy the cheaper one. Thus Best Buy loses its price advantage and leads itself to a relatively high-end market that gets less attention.
All in all, Best Buy didn’t get Chinese consumers preference very well, which is their extreme price conscious nature. And it had two too strong local competitors that posed a big threat to it.
Reference:http://en.wikipedia.org/wiki/Best_Buy
Do you think Best Buy would be able to revive it’s image in China by cutting costs and lowering prices; or do you think Chinese consumers will always view them as an expensive electronic outlet?
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