U.S. consumer electronics retailer Best Buy Co. Inc. is in talks with a Chinese e-commerce company over a potential acquisition or joint venture, as it looks to attract the country’s growing army of internet shoppers, the Beijing Times reported on Wednesday, citing an unnamed person claiming knowledge of the matter.
The news comes at a time when Best Buy is considering reopening 2 of the 9 branded stores in China that it closed earlier this year.
Best Buy has agreed terms with a local e-commerce company over their cooperation, and once everything is finalized the local firm will operate the U.S. firm’s online retailing platform in China, according to the source.
Re-Entry into China
Best Buy sees e-commerce as a channel through which to re-enter its brand into China. The company closed its 9 branded stores in February citing a change in strategy, although reports surfaced of poor sales and a misreading of the local market.
The U.S. firm sold 3 of its stores to Suning Appliances Co. Ltd. (002024.SZ) and 1 to GOME Electrical Appliances Holding Ltd. (0493.HK) — GOME and Suning are the leading consumer electronics retailers in the country.
Best Buy said at the time that it would focus on the expansion of its Five Star stores, a local consumer electronics retail chain that it bought majority control of in 2006 for $180 million. Five Star is China’s third-largest consumer electronics retailer.
The company’s plans to re-open stores and sell online suggest that Best Buy is hopeful of succeeding in China, and some market watchers said it reflects management changes at the firm.
Last month, Best Buy’s Asia Pacific president Kal Patel resigned and was succeeded by Dave Deno, who will retain his role as chief financial officer of Best Buy’s international operations at the same time.
Deno stated during his inauguration speech that China is the most important market for Best Buy to develop.
Source – Business China