Home Depot Case
9/15/12
Home Depot Learns Chinese Prefer 'Do‑It‑for‑Me' ‑ WSJ.com
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BUSINESS
Updated September 14, 2012, 5:52 p.m. ET
Home Depot Learns Chinese Prefer 'DoItforMe'
By L AU R IE BU R KITT
BEIJING—Home Depot Inc., in deciding to close all seven of its remaining bigbox stores in China after years of losses, joins a growing list of retailers who have stumbled in China by failing to grasp the local culture and importing alien business models that are better suited to the U.S. or other countries. The largest U.S. homeimprovement retailer, which entered China in 2006, has struggled to gain traction in a country where cheap labor has stunted the doityourself ethos and apartmentbased living leaves scarce demand for products like lumber. Home Depot conceded that it misread the country's appetite for doityourself products. "The market trend says this is more of a doitforme culture," a Home Depot spokeswoman said of China. Mattel Inc. shut its Chinabased Barbie flagship store in March of last year after it learned that Chinese parents would rather have their children read books than take a doll for a spin in her plastic Corvette. Best Buy Co. closed its nine China outlets in February 2011 after discovering that Chinese consumers needed washing machines and air conditioners more than espresso makers and stateoftheart surround sound stereo systems. A spokeswoman for Mattel said the toy company is still selling Barbie in China, but Mattel plans to promote more educational toys there. Best Buy said it is working with its Chinese subsidiary, Jiangsu Five Star Ltd., to sell appliances. It plans to open mobilephone specialty
Home Depot Learns Chinese Prefer 'Do‑It‑for‑Me' ‑ WSJ.com
Dow Jones Reprints: This copy is for your personal, noncommercial use only. To order presentationready copies for distribution to your colleagues, clients or customers, use the Order Reprints tool at the bottom of any article or visit www.djreprints.com See a sample reprint in PDF format. Order a reprint of this article now
BUSINESS
Updated September 14, 2012, 5:52 p.m. ET
Home Depot Learns Chinese Prefer 'DoItforMe'
By L AU R IE BU R KITT
BEIJING—Home Depot Inc., in deciding to close all seven of its remaining bigbox stores in China after years of losses, joins a growing list of retailers who have stumbled in China by failing to grasp the local culture and importing alien business models that are better suited to the U.S. or other countries. The largest U.S. homeimprovement retailer, which entered China in 2006, has struggled to gain traction in a country where cheap labor has stunted the doityourself ethos and apartmentbased living leaves scarce demand for products like lumber. Home Depot conceded that it misread the country's appetite for doityourself products. "The market trend says this is more of a doitforme culture," a Home Depot spokeswoman said of China. Mattel Inc. shut its Chinabased Barbie flagship store in March of last year after it learned that Chinese parents would rather have their children read books than take a doll for a spin in her plastic Corvette. Best Buy Co. closed its nine China outlets in February 2011 after discovering that Chinese consumers needed washing machines and air conditioners more than espresso makers and stateoftheart surround sound stereo systems. A spokeswoman for Mattel said the toy company is still selling Barbie in China, but Mattel plans to promote more educational toys there. Best Buy said it is working with its Chinese subsidiary, Jiangsu Five Star Ltd., to sell appliances. It plans to open mobilephone specialty