US electronics retailer Best Buy Co opened its first Mobile store inside
US electronics retailer Best Buy Co opened its first Mobile store inside a Nanjing branch of its subsidiary Five Star Appliance Co, marking a comeback of the retailer after it quit the Chinese market in early 2011.
The first Best Buy Mobile store in China, with a store-within-a-store (SWAS) concept, was opened in Five Star’s Liuhe branch in Nanjing, the capital of East China’s Jiangsu Province, and another store would also open within this week in Nanjing, Zhang Ke, director of Marketing & Brand Center of Jiangsu Five Star Appliance Co, told the Global Times yesterday.
According to Zhang, Five Star would open the first group of 14 Best Buy Mobile stores, all based on the SWAS model, in 2012 in Nanjing, selling phones, tablets and other mobile devices. The model would be expanded nationwide in the future.
The move signals the return of Best Buy to the Chinese market after it closed its nine stores in the country in February 2011 due to insufficient localization.
The SWAS model is one of Best Buy’s small steps in China as it learns from past experience, Ji Chendong, a senior IT consultant with KPMG China, told the Global Times yesterday.
“Five Star has leading position in Jiangsu and Best Buy Mobile has successful operational experience in the US and Europe, so Best Buy is aiming to achieve competitive differentiation by relying on these advantages,” Ji said.
However, as the popularity of e-commerce eats into the traditional store sales of home appliances and mobile devices, especially with lower prices, it remains uncertain whether Best Buy Mobile can replicate its success in China based on its professional services and product strategy, Ji noted.
Best Buy Mobile will also launch online stores when the offline model is well developed, according to Zhang.
Meanwhile, compared with Gome and Suning which both have more than 1,700 stores nationwide, Five Star, with only 209 stores, is in a weak position, so it is hard for both Five Star and Best Buy Mobile to follow low-cost strategy to compete with the retail giants, said Ji.
“It is hard for Best Buy to get a foothold in China’s mobile device market because the market is saturated and there is little room for a latecomer,” said Luo Qingqi, an analyst with Shandong-based Pa Le Consulting.
“Moreover, it does not have a big sales network, so it needs to sell something unique to win the market,” Luo noted.
Wang said the focus of the company is Best Buy Mobile store, and Best Buy itself would not enter China until it finds a suitable model.
http://www.globaltimes.cn/content/717559.shtml