The company’s problems in China stemmed from three main issues: piracy, cost-conscious customers, and the unpopular big-box retailer format. China’s extensive manufacturing infrastructure made it easier for competitors to make counterfeit Best Buy products and sell them at a lower cost than the store.
According to our research, Best Buy in China was perceived as being too expensive, with many of their products priced higher than in local markets. Why buy a Sony DVD player or Nokia phone at Best Buy when you can pay less for the exact same product at a local store?
Best Buy is not the first Western retailer to exit China–for example, Home Depot Inc. ( HD) also quit the Asian market in 2012. At the time of its exit, Best Buy ran 184 stores in China under the Five Star brand. However, Five Star’s geographical reach is limited: a majority of its stores are situated in the eastern Jiangsu province.
Are Chinese consumers to blame for the failure of Western retailers?
The announcement came a month after American home-improvement store chain Home Depot closed down its last outlet in Beijing. Critics have been quick to blame Chinese consumers for the failure of Western retailers.
Why did best buy fail in europe?
Best Buy apparently failed in Europe because they didn’t understand this new and different PUBLIC. According to Business Insider: “Best Buy should have known better—and done as much research on its European customers as it did a few years ago when it launched its stores in the U. S, targeting a very specific demographic with each store.” 5.
Why is best buy failing in the UK?
So far, it’s failed in both markets — mainly because consumers don’t like mega stores. After a few months of speculation, today Reuters reports that it’s likely Best Buy will abandon its stores in the UK altogether, blaming the move on the ” economic downturn, low brand recognition and a stiff competition from British market .”.
Though the company determined its Europe plans before the recession hit — when things looked much differently, and the “Big Box” concept was thriving in the U. — Best Buy should have considered a new strategy as it approached its launch dates (even if that meant delaying them again).
Why did Best Buy close down all its stores?
But the expected flood of customers failed to materialize. Instead, after struggling for six years, the company had a meager 1.8% market share, Best Buy closed down all six branded stores in 2011. The firm had already bought out Five Star Appliance in 2008 to propel its growth in the Chinese market.
What’s going on with Best Buy?
Best Buy had huge plans to move into Europe and China. So far, it’s failed in both markets — mainly because consumers don’t like mega stores.
Why is Best Buy closing all of its big box stores?
Best Buy’s attempt to cross the Atlantic and deliver US-style retailing to British consumers has failed miserably, with the retailer planning to close all of its big box stores in the UK.