Best Buy Is Lost In "Buyout".

In the US, consumers can buy a TV for three hours, but in China, you can comfortably experience the latest digital cameras in best buy, then stroll to the Pacific next door, and get it at a low price of several hundred yuan.

As the world's most famous consumer electronics retailer, best buy once wanted to reshape China with its own business philosophy.

"Buyout operation" acclimatized suppliers worry about declining performance

After announcing the closing of the store on 22 th, best buy in Shanghai has several daily refund stores.

But why can't this model please China's suppliers and consumers?

This person said, on the one hand, the buyout business has higher demand for terminal funds and greater risk. On the other hand, although the purchase of spot cash is welcomed by suppliers, the brand of Chinese household appliances is dispersed. Suppliers worry that the bias free shopping guide of best buy has reduced their labor expenditure, but in fact cut off their control of terminals, which may result in a decline in brand performance.

"The way we are now taking is 30% of the commodity business close to best buy, but at the same time let the factory be stationed in sales promoters."

This person said that the local stores have been developing for 20 years, and there is a more suitable strategy for China.

"Earn a lot of money", high prices and snail expansion

For consumers, the problem is clearly on the price.

A direct result of buyout operations is high input and high cost. Best buy is not like the local appliance store. It has uncertain returns such as rebates and entry fees, and pfers the proceeds to consumers.

"From the financial statements, the total gross profit of best buy reached about 25%, and the index of local household appliance retailers was around 16% or 17%.

In short, best buy makes more and spends more. "

A local household electrical appliance enterprise official said.

For example, the rental and decoration costs of best buy stores can not be passed on to suppliers. It is not a small cost to pay the salesmen hired by the stores. Best buy even needs to pay for the prototype itself and bear depreciation losses.

Positioning high-end high-end best buy is not willing to be involved in price war.

However, in China, consumers' sensitivity to price far exceeds their interest in service.

High investment, operating costs and the huge network of thousands of stores built by local home appliance retailers have raised the threshold for best buy, making it only 9 stores in China in the past 5 years.

Scale can not be done, procurement price has no advantage.

After the close of best buy, most local manufacturers reacted unfairly.

"The volume is too small."

The staff of SONY and LG interviewed reporters in an interview.

Take advantage of best buy's failure to do foreign marketing for home appliance manufacturers.

Best buy "go to Mai Cheng" did not let foreign home appliance retailers shrink back.

Two days after best buy announced the closing of the store, the company announced that it opened its second stores in China and started marketing with the failure of best buy.

It advertised in Shanghai newspapers: "after February, 22, they quit, we give you reassurance."

And promise to buy products from them, Wan De City will provide maintenance, quality assurance and other services.

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However, while digging the opponents' feet, "Wan de Cheng" undoubtedly revised their own China strategy.

Tang Wangtao, China CEO of Wan De City, said that one of the core strategies is to provide "local low price protection".

Best buy China's most decisions and operations come from global headquarters, resulting in its slow market decision making.

In this regard, Tang Wangtao stressed that Wan De City adopted the "decentralization mode", that is, the devolution of rights, the store manager has free procurement rights and pricing power, this mode will keep the store flexible decision-making and the lowest price.