Best Buy in China
Best Buy’s failure in China is another example of a slow, arrogant major international player that didn’t understand China. Their own explanation of why they failed: “China’s demand for low prices without regard for service,” is clearly a lame excuse.
By Fang Yu, China Entrepreneur magazine
Best Buy shut down their nine stores in China on February 22nd, and within 48 hours fell into an unprecedented credibility crisis. Customers rushed to Best Buy stores on hearing the news and were locked outside security doors. They finally broke through the doors and went into the shops, partly to seek refunds on the extended warranty policies they had purchased. Because of quarrels with staff over return policies, the Shanghai Municipal Government had to send police to maintain order. Best Buy, which has always boasted it was centered around consumers, never predicted it would withdraw from the Chinese market in such a disgraceful way.
Best Buy China top executives said the business closed because their model did not adapt to the Chinese market. Best Buy China president David Sisson said, “I have never worked in such a price-sensitive market.”
Best Buy shops within China were forced to close after a five year struggle
Best Buy explains its failure with the excuse “Chinese consumers pursue low prices rather than services.” This excuse shows that Best Buy still does not understand why it failed. This excuse does not take into account that China’s spending power is the fastest growing in the world. Home appliance expert and director of the Pal consulting firm Luo Qingqi argues luxury brands now entering into Chinese second- and third-tier cities, and the purchasing power for luxury cars in Chinese inland is no worse than in the first-tier cities. Ding Jie, a global partner at the Roland Berger consulting firm, notes that there are foreign retailers running excellently China. Why not Best Buy?
Slow and arrogant
Dennis, who has worked for ten years
By Fang Yu, China Entrepreneur magazine
Best Buy shut down their nine stores in China on February 22nd, and within 48 hours fell into an unprecedented credibility crisis. Customers rushed to Best Buy stores on hearing the news and were locked outside security doors. They finally broke through the doors and went into the shops, partly to seek refunds on the extended warranty policies they had purchased. Because of quarrels with staff over return policies, the Shanghai Municipal Government had to send police to maintain order. Best Buy, which has always boasted it was centered around consumers, never predicted it would withdraw from the Chinese market in such a disgraceful way.
Best Buy China top executives said the business closed because their model did not adapt to the Chinese market. Best Buy China president David Sisson said, “I have never worked in such a price-sensitive market.”
Best Buy shops within China were forced to close after a five year struggle
Best Buy explains its failure with the excuse “Chinese consumers pursue low prices rather than services.” This excuse shows that Best Buy still does not understand why it failed. This excuse does not take into account that China’s spending power is the fastest growing in the world. Home appliance expert and director of the Pal consulting firm Luo Qingqi argues luxury brands now entering into Chinese second- and third-tier cities, and the purchasing power for luxury cars in Chinese inland is no worse than in the first-tier cities. Ding Jie, a global partner at the Roland Berger consulting firm, notes that there are foreign retailers running excellently China. Why not Best Buy?
Slow and arrogant
Dennis, who has worked for ten years