Gadgets & Electronics

Best Buy Opens Two New Stores In Shanghai

With Chinese electronics retailers pessimistic about the next few financial quarters because of the financial crisis, Best Buy (BBY) has its blinders on in China and has just opened two new stores in Shanghai, increasing its total retail outlets in China to four.

Both located in Shanghai's Pudong area, the Best Buy New Land Plaza store and the Super Brand Mall store will focus on medium and high-end customers.

Yang Deming, president and COO for Best Buy Asia-Pacific, stated that the company will accelerate its development in 2009 and promote its deployment in China actively and steadily. According to Yang, Best Buy plans to open two more new stores in Shanghai before the end of 2008. By then, the company will have six outlets in the city, covering Xuhui, Changning, Pudong and Minhang districts.

The new plan forms a sharp contrast to its slow development in China over the last two years. In 2006, Best Buy opened its first Chinese retail store in Shanghai, but the coming of Best Buy has not brought any change to the structure of Chinese electronics retail industry over the past two years.

However, as Huang Guangyu, chairman of the Chinese appliances retail giant Gome, is under investigation for economic crimes, foreign electronics retailers like Best Buy might have opportunities to control the entire industry chain. Gome has more than 1,300 stores in over 300 Chinese cities and about 500 companies involved in its retail platform. If Gome is unstable, about 15% of the domestic sales of the Chinese appliances manufacturing industry will be affected, which will benefit U.S. and Japanese appliances retailers' expansion in the Chinese market.

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