Best Buy to Extend Business in China

SHANGHAI, Feb 26, 2008 (SinoCast China IT Watch via COMTEX) -- BBY | news | PowerRating | PR Charts -- US-based retailer of consumer electronics and entertainment software Best Buy Co., Inc. (NYSE: BBY | news | PowerRating | PR Charts ) is set to open six to eight new stores in the first-tier Chinese city of Shanghai over the coming year, unveiled Robert A. Willett, chief executive officer of Best Buy International.

In the following three to five years, China will become the most important market for Best Buy besides the US market.

"The company will strive to open the second store in a short period," confirmed Willett. "In fact, Best Buy did not exert all its strength to expand in Shanghai, an economic engine in east China, in the past. And it will focus on the business expansion there. As the first step, it has hired an executive for site picking recently," added Willett.

Its second outlet is estimated to make a presence in the Zhongshan Park commercial and shopping center in Shanghai at the end of March, said sources.

The leading US retailer experienced a series of challenges in the booming Chinese market since it marched into China nearly five years ago. Although an office was set in Shanghai as early as 2003, Best Buy did not launch its first entity store until the end of 2006.

Of all the global markets, Canada, where Best Buy spent three to four years on business extension, is currently the biggest one for its international business. The company has made a long-term plan to extend its reach in China, a market with more opportunities than Canada, said Willett.

It has poured a large amount of investments in infrastructure construction in the nation and expects that would help acceleration of its outlet expansion plan, citing Willett.

Currently the US operation contributed most to its sales growth, however, the Chinese operation is the fastest growing one among all its newly launched operations, pointed out Willett. The flagship outlet in Shanghai has ranked the top 50 by sales revenue among its outlets around the world, according to sources.

However, to enlarge its reach in the nation not the only headache for Best Buy. GOME Electrical Appliances Holding Ltd. (SEHK: 0493), one of the largest home appliance retailers in China, is focusing on acquisitions in the industry. Best Buy was rumored to have share swap plans with GOME.

Best Buy keeps a satisfied partnership with Nanjing- Headquartered Jiangsu Five Star Appliance Co., Ltd. and smooth contacts with manufacturers in the nation. And it has no plans to swap shares with any Chinese companies, said the CEO when asked about the matter.

From www.cnstock.com, Page 1, Monday, February 25, 2008 info@SinoCast.com

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