Can a Small Business Survive? (2)

How strong are FJ’s competitors?

As I’ve mentioned before, Gome and Sunning is like the Bestbuy and Futureshop in Canada. Take Gome for example, (since there is a Gome store just a mile away from FJ), it was opened in Beijing on January 1st, 1987 and now it becomes the largest 3C (computing, communication, and consumer electronic) retail chain in China with around 1200 stores. It’s main mission is “Competitive price from high volume, customer service comes first”.

(Gome’s mission & store locations. Snip from http://www.gome.com.hk)

It is true that Gome provide low price. Due to the immature market regulation in China, retailers have price war with each other which lead the gross margin to a really low level.  Manufacturers offer discount to retailers base on the size of retailers’s order, which means if a retailer don’t have the ability to order huge among of goods then it cannot provide low price to customers and finally it has no choice but leave the market. This is also the main reason why small business are suffering through the battle of big retailers.

However, when we move to customer service, I’m going to slightly lean my head, knit my brow, shrug my shoulders and show my palms. (Ya, just like what you are doing!…If I’m right 😉 ). First of all, all the sales clerks in any retail stores are pretty much the same.  Secondly, if you type “Gome delivery” in a Chinese search engine, beside the advertisements, all you can find are negative  information. Last but not least,  Gome do not have its own maintenance department and I will elaborate this in next post.

Beside these retail chains, I’m actually happy to see that some other small retailers are also earning their living in that area, which means there still are market available for FJ to capture (remember FJ was the best). However, do I dare to imagine that FJ not only survives but also grows up? I hope so.