Ben Cavender CMR 3
Ben Cavender

The decision to close down German retailer Media Markt in China shows – yet again – a profound lack of understanding on how the market in China works, tells business analyst Ben Cavender in the China Daily.

The China Daily:

Experts said the closure of Media Markt China would represent the highest-profile retail failuresince early 2011, when Best Buy, the United States-based electronic products retailer, closedits nine branded stores in China along with its Shanghai headquarters.

Some experts have also suggested that Media Markt stores occupied too much space on some of the most expensive retail streets in China, an unworkable plan when selling cheap products.

Ben Cavender, associate principal of China Market Research Group, said it would not mark the failure of a Western business model, but the failure to understand the dynamics of the China market and the wider transformation of the country’s retail sector.

“Local competitors Gome and Suning have built strong brand presence and market share inChina, and their huge store numbers guarantee a competitive advantage,” said Cavender.

“Additionally, consumers are increasingly using brick-and-mortar stores as showrooms beforebuying their products online, where they can save both money and time.”

More in the China Daily.

Ben Cavender is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.

Ben Cavender discussed last summer failed attemps by foreign companies to localize their operation. Examples include Gap, B&Q, Dunkin Donuts and IKEA.

Enhanced by Zemanta
Please follow and like us: