No cookie-cutter marketing stategies in China, please


In Shanghai, everywhere I turn, I am pleasantly surprised at the number of familiar American brands popping up everywhere. Outlets that I couldn’t even find in the supposedly much more ‘West-friendly’ Hong Kong. I find comfort in my ice-blended mocha from Coffee Bean and Tea Leaf, a Western Bacon cheeseburger from Carl’s Jr. and cotton tees from the Gap. So imagine my giddy excitement a few months ago when, from a distance, I saw the sign for one of my all time favorite electronic stores: Best Buy.

Back in the States, Best Buy was the ultimate in comfort shopping for any techno-geek like myself. It’s where I knew I’d find anything and everything I needed, ahem… wanted. It’s where I know I’ll be greeted by passionate and smiling salespeople all donning cheery blue polos with a jolly yellow badge. But as I approached the Shanghai storefront, I noticed the normally vibrant blue and yellow sign wasn’t so vibrant, in fact it was covered with a thin layer of dust, rotting behind a rusty locked gate. It was a retail tomb…

Earlier this year in February, the company made business headlines and unfortunately it was not the good kind. It announced that it was closing all nine of its branded stores in China. Best Buy was bested by its Chinese competitors. Analysts and economists were quick to cover Best Buy China’s obituary, as the latest “tragic victim of the risky realities of doing business in China.”

While doing business in China can be tougher than tough, upon further digging it seems that Best Buy may have simply committed an age-old mistake that many marketers have committed before: imposing “successfully proven” marketing strategies from home onto foreign markets and expecting the same successful result. In Best Buy’s case the hiccups were painfully obvious.

Instead of building smaller stores conveniently located for commuting urbanites, Best Buy replicated its huge American-sized flagships located outside city centers. Compared to other electronic retailers in densely populated and high-trafficked cities like Shanghai and Beijing, it just wasn’t accessible. Instead of learning that price was #1 factor when Chinese consumers buy electronics, Best Buy focused on providing “amazing customer service”. Sure American consumers are willing to pay a slight premium for service and superior shopping experience, Chinese consumers just can’t seem to rationalize paying a cent more for the same product they could get just around the block. In fact, Best Buy should have known that when it came to service and product knowledge, Chinese consumers expect it to come from the manufacturer not the retailer.

Some analysts have said that the current Chinese retail market is just not mature enough to support strong brand equities. Others have criticized some failed multinational brands for their arrogance and inability to adapt to local markets. Regardless, simple marketing 101 tells us that you probably shouldn’t cookie-cut your market strategy when addressing various multicultural segments in the United States or in foreign markets. And while global brand consistency is important, so is taking into account local considerations and consumer behavior in the highly consumer-focused retail sector. This should drive your go-to-market strategies.

Last month, Best Buy announced it had put in place a new Asia president who brings along with him strong Chinese retail experience. So perhaps the brand hasn’t given up on the China market just yet and we just might soon see the bold yellow and blue logo appear once again around town.

- by ADM @Asia


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