By Star Chang, posted Feb 28, 2011 at 10:56 AM, 2,641 views,

Media Markt Opened Its Second Retail Store in China

Europe’s leading electrical products retailer, Media Markt, has announced the opening of second retail store in Shanghai, China. The announcement came just two days after Media Markt China’s biggest rival, Best Buy, decided to close all nine stores in China. Media Markt China, owned by Germany’s Media-Saturn Holdings and its joint venture partner Foxconn, has their very first retail store opened during last year November. They have planned out to operate another 10 more stores in Shanghai by 2012, and add 100 new stores across the country by 2015. What a huge investment!

The second store will be located between the residential and commercial areas in central Pudong, and the store takes up a sales area of 4,600 square meters, which is only half the size compare to their first one. The two-level store aims to provide electronic products from an impressively wide range of international and domestic brands, as well as customer experiences in trying out the products instantly. Further highlights of the store are its modern hi-fi department and the relaxation area with massage armchairs. In addition to a wide range of in-house services, the store offers complimentary delivery as well as a full-fledged installation, setup and repair service.

According to Media Markt’s own research, China’s electronics retail market will be worth 150 billion euros (US $207 billion) by 2013, and the Shanghai market alone will exceed 5.5 billion euros. The expansion plan comes amid questions about the feasibility of foreign business models for consumer electronics retailing in the Chinese market. Best Buy announced it will re-evaluate its strategy following the failure of its operation in China. Nevertheless, falling revenue in saturated western countries has persuaded retailers such as Media Markt to increase their presence in China.

Meanwhile, the booming e-commerce market in China has already eaten into the profitability of electronics retailers, as its lower prices and greater convenience attracts the younger consumers. Most Chinese consumers are very price sensitive which can hardly resist attractive discount. Many of these e-commerce platforms also guarantee the same after-sales service just like the traditional retail stores. As a result, operating within the traditional distribution channels has become more difficult. The influx of international electronics retailers will intensify the already fierce competition in the Chinese market. Leading local retailers such as Gome and Suning will have to rack their brains to attract customers, having already slashed their profit margins.

Although the sales area of the new store is not as big as the first one, Media Markt’s second retail store is still considered a larger electronic store than other local electronics retailers.

Inside the store, you can see a lot of security signs, reminding Chinese customers to take care the display products while hands-on trying.

The new modern hi-fi department shows off very expensive home-cinema equipments.

During the local press visit day, which is before the official opening, those bulk containers which are filled with special offer products, are all listed with mystery price tags, making the press wondering how low the price can it goes down to!

The old iPhone 3Gs is having special offer with mystery low price!

Foxconn is the joint venture partner, so again, we have Apple’s corner.

Ton Wortel, CEO of Media Markt China, said the company’s expansion has been rapid, and the first store in Shanghai shows that their business concept is working in China. Hooray!

Before the newest store opening, Media Markt China make advertisement on local newspaper, telling Chinese consumers that they are planning to take over those Best Buy after sale services. The ad said: ‘After 22nd Feb, they quit and we ease your mind‘.

We really hope the marketing research which has done by the German’s company (with Foxconn) has a correct foresee, and not just end up like Best Buy!

Source: China Daily, PChome