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Keep an Eye on Best Buy
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China's top appliance chains Gome and Suning have been unusually quiet of late over competition from top US consumer electronics retailer Best Buy, which opened its first store outside North America on December 28 in Shanghai.

This is a big contrast to the panic after Best Buy bought Jiangsu Five Star Appliance Co in May last year.

The acquisition not only caused fear throughout the industry, it also pushed Gome, China's largest appliance retailer, to speed up its takeover of Shanghai-based China Paradise. Gome also blocked Best Buy in taking over a commercial space in Beijing five months ago.

Best Buy is not likely to pose an immediate threat to its Chinese rivals, despite the fact that its 8,000-square-meter store in Shanghai's downtown Xujiahui is its biggest worldwide. Gome and China Paradise have more than 800 stores and Suning has more than 430 outlets across the country. In Shanghai alone, the new Gome has 110 stores.

But a visit to the four-story Best Buy store shows that the Fortune 500 company has brought more than just a new retail outlet to the market. The Best Buy store is revolutionary in the shopping experience it offers.

The clean, spacious and brightly lit store, where products are arranged according to category rather than by manufacturer, contrasts sharply to the often dingy Chinese appliance stores. In this sense, the Best Buy store is a luxury version of those run by its Chinese rivals.

Product displays at Best Buy are customer-friendly. Open shelves allow shoppers to try digital cameras, video cameras and mobile phones. In Chinese-run stores, shoppers almost always have to ask shop assistants for help to inspect items.

And Best Buy assistants play a vital role in making shopping a pleasant experience.

Unlike Gome and Suning, where many shop assistants are actually factory representatives who peddle their own brands, Best Buy hires all shop staff directly, so they are more likely to provide impartial advice to customers.

Best Buy has also brought a new payment method to the Chinese market. Unlike the lengthy accounts process of its Chinese rivals, Best Buy pays its own inventory and sources its products globally, with 72 percent of its stock reportedly from China.

(China Daily January 9, 2007)

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