Best Buy China's first store will settle in Shanghai Xujiahui this month

The world's largest home appliance chain company Best Buy's first store will settle in Shanghai Xujiahui this month.

"This month, Best Buy will sign a definitive agreement with owner Feijian Group of Jiangshan Building in Shanghai's Xuhui District and is currently undergoing renovations. The first investment is likely to reach RMB 250 million." Yesterday, people familiar with the situation revealed to reporters.

Just three months ago, when Best Buy Shanghai was established, Lu Weiming, the company’s global vice president and president of Asia Pacific, emphasized that “there is no concrete plan for the new store.”

In fact, Best Buy established its Asia Pacific headquarters in Shanghai as early as 2003, and has established two offices in Beijing and Shenzhen. In March 2005, the Asia-Pacific purchasing headquarters also settled in Shanghai. According to the 2003 development plan, Best Buy will set up its first store in Shanghai by the end of 2003. However, in the past three years, Best Buy's first store in China has only had a definite news.

Sun Weimin, president of Suning Appliance, told reporters recently that direct purchases have always been Best Buy's style. They currently only use China as a place of business purchase. Zou Xiaojing, the spokesman for Best Buy Asia Headquarters, once said that the main business of Best Buy currently in China is commercial procurement and does not do retail business. In 2006, Best Buy’s purchases in China are expected to be US$900 million.

Of course, Best Buy did not give up its inspection of key cities in China. In early November 2005, Alan, its global president, said in Chengdu that Best Buy will officially set up its first store in China in the next 12 months.

“The rental price of this lot is ridiculously high. Best Buy has established a store in this commercial district, which may be showing a shock to the domestic counterparts. The significance of its corporate image display may be higher than the actual profitable operation.” Huang Jianping told reporters yesterday.

Huang Jianping believes that the market structure of China's home appliance chain operation has basically taken shape, and the nationwide network layout has also begun. Local companies, including Yongle, will not fear any foreign rivals. "Not to mention everyone is already listed and is beginning to operate internationally," he said.

"Suning Appliance does not care who will come in. We are more concerned with doing our own thing." Sun Weimin told reporters not long ago that although Best Buy is indeed the world's No. 1 in terms of capital and scale, its main business is concentrated in North America. The Chinese market has its particular competitive environment.

One of Gome’s top executives believes that foreign chain stores don’t look like Chinese companies and they spend a lot of time investigating them. Once you have decided to open a store, the speed will be very fast.

At the same time, the reporter learned that the Jiangshan Building was built in 1993, and later the capital chain broke and the project ran aground. In July last year, Zhejiang Feidiao Group took over 720 million yuan. Yesterday, Gu Ying, vice president of Flying Eagle Group, confirmed to reporters that the two sides are negotiating cooperation matters, but declined to disclose any details.