Best Buy brand shuts up shop in China and Turkey

amoy

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FT.com

By Jonathan Birchall, Patti Waldmeir, Delphine Strauss in New York, in Shanghai, in Ankara

Best Buy, the world's largest electronics retailer by sales, is closing all of its branded stores in China, highlighting the resistance of Chinese shoppers to some western-style store experiences.

The retailer, which will continue to run 170 stores in China under the Five Star brand acquired five years ago, is also giving up an attempt to enter Turkey, with the closure of two trial-run stores opened in the past two years.

The company said in a statement that it would close all nine China stores that carry the Best Buy brand, one of the best known US retail marques, but one that has failed to catch on in China. It captured less than 1 per cent of the China market, analysts said, struggling to compete against the more agile and aggressive homegrown rivals Gome and Suning, which each have more than 1,000 branded stores in China.

Best Buy's business model in the US, where the brand markets itself as providing a better service than its competitors, has not gone down well in China. "Best Buy believed it could grab market share in China by offering high-quality service and a good shopping experience," says Torsten Stocker, retail analyst at Monitor Group. "But what determines Chinese consumers' purchasing decisions is price, not service."

Best Buy's store strategy was also at odds with local habits. Chinese retailers generally divide up electronics and other large- ticket items by leading brands, rather than category, supported by sales staff working for the manufacturers rather than for the retailer.

Home Depot and Kingfisher, the US and UK home improvement retailers, have also struggled with western- style sales models in China. In contrast, Chinese shoppers have enthusiastically embraced modern supermarkets and discount stores operated by leading international retailers including Walmart, Metro and Tesco.

Dora Sahintürk, from Istanbul retail specialist AVM Mfi Partners, said Best Buy had suffered in Turkey from trying to compete on quality in a price-sensitive market.
 

Ray

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Carrefour is still operating in China?
 

redragon

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those foreign retailer/wholesalers and some service provider like google and yahoo are repeating what they have been through in Korean and Japan. In the future, hopefully we can see businesses with marks of eastern asian coulture can spread their impact outside of eastern asia
 

amoy

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(Almost) gone were the days mom-n-pop stores thriving

Quite a few Carrefour in my home city but their reputation was severely damaged recently (in PR crisis)

Carrefour, Wal-Mart face fines over prices

0 CommentsPrint E-mail Shanghai Daily, January 27, 2011

Carrefour and Wal-Mart outlets in cities such as Shanghai, Chongqing and Shenyang were found to have engaged in pricing fraud, including fabricating the purported original prices.
Retail giants Carrefour and Wal-Mart are facing fines of up to 500,000 yuan (US$75,954) for overpricing and cheating, according to China's top economic planner.

The National Development and Reform Commission said yesterday that an investigation had found some Carrefour and Wal-Mart outlets in China were "cheating" customers with bogus prices or misleading tags but charging a higher amount at the check-out.

An investigation into supermarket prices was launched after complaints from customers.

The commission said the practices uncovered were violations of China's laws and hurt consumers' interests.

It said price frauds were reported in more than 10 Carrefour and Wal-Mart shops nationwide, including branches in Shanghai, Changchun, Shenyang and Kunming, and covered a wide range of products from clothes and homeware to food.

During the investigation, a 338-gram pack of sunflower seeds was sold at 6.9 yuan in a Carrefour Lianyang store in Shanghai, discounted from 14.80 yuan.

But the actual original price should have been 7.4 yuan.

In a Wal-Mart Beicheng Tianjie Store in Chongqing, one kind of Tie Guanyin tea was priced at 29 yuan but customers were asked to pay 39.8 yuan when they reached the check-out.

Zhao Jiaoli, secretary general of the Shanghai Commission of Consumers' Rights and Interests Protection, said complaints about pricing increased during year-end promotions.

"The major reason is that consumers have difficulties in acquiring real price information from sellers," said Zhao. "All the retailers need to be honest when they launch promotions."

Carrefour China apologized for any pricing irregularities and said the company would establish a special control group to conduct internal price quality inspections.

The company pledged to refund five times any difference between price tag and check-out price.

Wal-Mart also issued a statement saying it would strengthen efforts on price inspections and treat any problems extremely seriously.

Carrefour was the biggest foreign chain operator in China and ranked seventh among China's top 100 franchise retailers in 2009, according to the China Chain Store and Franchise Association. Its 2009 revenue totaled 36.6 billion yuan with 156 outlets nationwide.

Wal-Mart was ninth in 2009's top 100 list with 34 billion yuan in revenue from 175 stores in China.
 

RebateKing

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Hm, but I read Apple is doing phenomenally well with its retail operation in China, and is opening more stores.
 

Ray

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During the investigation, a 338-gram pack of sunflower seeds was sold at 6.9 yuan in a Carrefour Lianyang store in Shanghai, discounted from 14.80 yuan.

But the actual original price should have been 7.4 yuan.
On what basis was the price 14.80 yuan and on what parameters was it calculated that the actual price should have been 7.4 yuan?

If these can be amplified, then one could understand the mechanics of the fraudulent system of pricing.
 

Ray

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Where did you get the idea it is not?
I did not get that idea.

Remember the Olympics where China went after Carrefour because it could not take France head on?

So, a company is threatened because China cannot do a sausage to the country!

That was the genesis of the question of mine.

It was not addressed to you and if you had something to contribute, it would be welcomed. As it stands, your one liner is quite out of context.

If you had anything substantial, you would have then stated.

Right now, your out of context and disconnected one liner with nothing substantial to clarify/ amplify appears to a pathetic attempt to either flamebait or downright trolling!

As a Moderator, I would state that it is requested that you may like to contribute fruitfully to the discussion rather than waste bandwidth!
 
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nimo_cn

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I did not get that idea.

Remember the Olympics where China went after Carrefour because it could not take France head on?

So, a company is threatened because China cannot do a sausage to the country!

That was the genesis of the question of mine.

It was not addressed to you and if you had something to contribute, it would be welcomed. As it stands, your one liner is quite out of context.

If you had anything substantial, you would have then stated.

Right now, your out of context and disconnected one liner with nothing substantial to clarify/ amplify appears to a pathetic attempt to either flamebait or downright trolling!

As a Moderator, I would state that it is requested that you may like to contribute fruitfully to the discussion rather than waste bandwidth!
Well, do forgive me if offended you.

First, let me explain my question in the previous post. When you asked the question "Carrefour is still operating in China?", you used the word "still" in your sentence. I think I have interpreted it correctly by assuming that you asked theat question because you believed Carrefour is not operating in China. Of course I may be wrong if I didn't learn the usage of the word "still" correctly.

Second, during the Olympic, some Chinese did protest Carrefour, but that doesn't mean China went after Carrefour. There was not official move to stop Carrefour from doing business in China. In fact, Chinese authority deployed police to the protest site to maitain the order in case that the situation got out of control and Carrefour got smashed by angry protesters. It was a purely spontaneous protest by common Chinese people after they read about what happened in Paris during the torch relay. And more importantly, people chose to protest Carrefour because they think it was a symbol of France and they wanted their voice to be heard by France, not because they wanted to prevent Carrefour from doing business in China.

As a Chinese, I urge you to get information about China rightly. Otherwise, such unhappy episode will keep on happenning before I get banned.
 
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Ray

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Well, do forgive me if offended you.
I don't get offended so quickly.

That is why I continue to debate even if some people are quite obtuse.

If you take that thread on the question of the Southern Han and their ethnicity. There were moments of horrifying obtuseness including a poster calling me a liar (there was no reason to do so, since I was posting links to my posts and if anyone was a liar, it were the scholars, including Chinese scholars, and hence calling me a liar was uncalled for), and yet, I continued debating, though I requested him to not call me a liar. I think, that thread was most educative and I learnt a lot from the Chinese posters including their psyche. So, I engage in debate to learn and not to troll or be abusive or take anyone as one from an enemy country.

First, let me explain my question in the previous post. When you asked the question "Carrefour is still operating in China?", you used the word "still" in your sentence. I think I have interpreted it correctly by assuming that you asked theat question because you believed Carrefour is not operating in China. Of course I may be wrong if I didn't learn the usage of the word "still" correctly.

Second, during the Olympic, some Chinese did protest Carrefour, but that doesn't mean China went after Carrefour. There was not official move to stop Carrefour from doing business in China. In fact, Chinese authority deployed police to the protest site to maitain the order in case that the situation got out of control and Carrefour got smashed by angry protesters. It was a purely spontaneous protest by common Chinese people after they read about what happened in Paris during the torch relay. And more importantly, people chose to protest Carrefour because they think it was a symbol of France and they wanted their voice to be heard by France, not because they wanted to prevent Carrefour from doing business in China.
It was said during the Olympics that Carrefour would be shut down.

Last week Mr Kong, 24, an IT worker, turned to an entirely modern method of disseminating his ideas, however.

He set up websites to campaign for a boycott of two of the most popular Western companies operating in China - the French supermarket chain, Carrefour, and the American fast food group, KFC.

He is not alone. Angered by the disruption of the Paris leg of the Olympic torch relay, and by widespread but unsubstantiated rumours that one of Carrefour's major shareholders, the luxury goods company LVMH, had been making donations to the Dalai Lama, people across China are using the internet and text messages to call for a boycott of the company's 122 stores on May 1......

But throughout last week there were demonstrations outside the company's stores across China, as people sang the Chinese national anthem, burnt the French flag and held banners aloft, calling on the French government to apologise to "all Chinese people".....

In south-east Beijing a protest outside a branch of Carrefour was broken up by police, and a police cordon was thrown round the city's French school and embassy, to protect them from hostile demonstrations.
http://www.telegraph.co.uk/news/worldnews/1896175/Chinese-boycott-Western-chains-over-Olympics.html
I was not aware of the latest and so I asked if Carrefour was still functioning.

As a Chinese, I urge you to get information about China rightly. Otherwise, such unhappy episode will keep on happenning before I get banned.
As an Indian, I ask you to correct errors in our perceptions with links.

We do not take every single media news ( western or otherwise) at its face value. Therefore, contributions by the Chinese are worth our while, but with links and not fevered anger or imagination.

Lastly, this is possibly the only Forum in the world that does not BAN. If we feel that someone has flown over the cuckoo's nest, we moderate their posts.

We are thus more democratic than democracy itself! :>
 
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