After much preparation, American electronics retailer Best Buy (BBY) will open its second flagship store in China in Shanghai's Zhongshan Park area on August 26, 2008.
At the end of 2006, Best Buy opened its first flagship store in China in Shanghai's bustling Xujiahui area. However, the development of Best Buy in China was temporarily suspended after the opening of its first store and its second store has not been able to open until now. There have been rumors that the reason for the delay was that the store had internal renovation problems, but industry insiders say the truth is that the company did not get the approval from the Ministry of Commerce. An unrelated problem was that Best Buy also recently closed its Beijing sourcing and procurement office.
According to the Administration of Foreign Investment in Commercial Sectors Procedures, to open a foreign-invested retail store, the store should hand in an application to a provincial commerce ministry in addition to fulfilling some general qualifications. It also should be reported to the Ministry of Commerce of China within one month of the handing in of the application and the Ministry of Commerce will reply in three months. Local media report that Best Buy handed in the application early in the second half of 2007, but it received the approval only recently.
While preparing for the opening of its second store in China, Best Buy is also selecting new sites to open more stores in Shanghai and it already selected three places: Super Brand Mall at Lujiazui, Pudong; Xinzhuang subway station; and Shanghai Commercial City.