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North American consumer electronics giant Best Buy will formally launch its first store in China today, claiming success in sales and customer satisfaction during its trial run last month.

 

Setting its sights on the country's lucrative electronics market, estimated to be worth as much as US$100 billion, Best Buy said yesterday it will open one to two new stores in China over the next 12 to 18 months, with its subsidiary Five Star Appliance opening 20 to 25 more outlets in the period.

 

The company expects that over time it will be the dominant player in China, said Robert A. Willett, chief executive officer of Best Buy International.

 

"The fact is that we are not tied to those figures. We can open 100 stores a year or more. The important thing for us is to make sure of making a paradigm shift in customer experience," he said.

 

But its Chinese rivals said last week that they would not consider Best Buy a major threat because of its presence in China.

 

Late last month, Best Buy, which has 1,100 retail stores across North America, launched a month-long trial of its flagship store in Shanghai's Xujiahui, a business area with customer traffic and visibility twice that of Times Square in New York City.

 

The area is also a Mecca for domestic consumer electronics retailers and home to over 130 chain stores such as Gome and Suning.

 

"We are delighted to say that we are happy with our first Best Buy store here in Shanghai," Willett said.

 

Declining to reveal sales volume for the first month, Willett said the store's performance has "exceeded their expectations very significantly" and estimated the outlet would be in the top 10 in Best Buy's worldwide stores over the next 12 months.

 

According to a survey released by the firm, overall customer satisfaction was pegged at 8.5 out of 10, with 89 percent agreeing the store provides an easy shopping experience. More importantly, 74 percent of customers said that Best Buy's prices were competitive.

 

Best Buy plans to eventually become the top player in the China market.

 

"We had no market share in Canada four years ago," Willett said. "Within four years we had 13 percent of the market. It took us time to get going, to learn and to understand, and now we are growing our share very rapidly in Canada and we will do exactly the same thing once we are clear on what our customers want."

 

(China Daily January 26, 2007)