Recently Best Buy, the Us electronics retailer, announced plans to close all its own brand shop in China. It will continue to operate the local chain that it has already purchased; "5 star". So what went wrong and what lessons can other enterprise learn from another major Western retailer's rapid stepping back from the Middle Kingdom?
Best Buy's failure in the Chinese market can be put down as failure in market differentiation.
Market differentiation is the art of making your offering dissimilar (and thus intelligent to consumers) from other similar offerings in the marketplace at that moment. Western retailers have failed to understand the Chinese consumer when they begin this process and often find themselves falling into the trap of distinguishing their brand through "quality of service". This is natural because this aspect of the purchasing perceive is the key to success in advanced nations; Best Buy's power in the Us is that their straightforward and high touch aid makes it hugely intelligent to American consumers.
