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Best Buy to add Shanghai outlet

By Chen Qide (China Daily)
Updated: 2007-10-09 10:34

US retailer Best Buy plans to open a second Shanghai outlet as part of its strategic expansion in China.

Robert Willett, president of Best Buy International, said the group will open a second Best Buy store in Shanghai in the coming year if it can find a suitable site.

"We are seeking the right location for the new outlet in the city to expand our business," said Willett.

He said the company's first store in Shanghai's downtown Xujiahui area, which opened earlier this year, had been successful enough to warrant a second outlet in the city.

Best Buy hasn't expanded as quickly as industry watchers expected in China. But Brad Anderson, vice-chairman and CEO of Best Buy Corporate Campus, said the chain is not falling behind its competitors.

"We are studying the Chinese market to find out what Chinese consumers expect and want," said Anderson.

"Best Buy needs experience in the China market, but it takes time."

Willett said Best Buy will focus on building infrastructure and establishing an international sourcing team.

"We don't want to make mistakes - our investment in China is a long-term plan," he said.

Best Buy acquired Jiangsu Five Star Appliance Co Ltd in 2006 at a cost of US$180 million to set up a joint venture. It holds a 51 percent stake in the venture.

It plans to open 23 to 25 Five Star outlets in cities around Shanghai next year, and to co-develop a new type of Five Star store.

"Best Buy will apply its dual brand strategy to the China market, which has proved successful in Canada," Willett said.

Best Buy manages 127 Future Shop outlets and 48 Best Buy stores in Canada.

"We will try to suit the changing needs of local consumers," Willett said.

"Our objective is to keep Five Star's culture separate from Best Buy's, but to make their value the same."

"We will focus on Nanjing in Jiangsu and Shanghai first, then on some provinces. Eventually we want to invest across the country."

Best Buy's rivals - Chinese retailers Suning Appliance Co Ltd and Gome Electrical Appliance Ltd - are also planning to expand nationwide.

Suning has 413 outlets in China and plans to add up to 180 new stores in the next five years, while Gome has close to 1,000 shops.


(For more biz stories, please visit Industry Updates)



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