Media Markt ready for Shanghai debut
By Jin Jing |
May 21, 2010, Friday
|
Print Edition
Print Edition
GERMAN retailer Metro AG will open its first consumer electronics outlet in China in October as part of its Asia expansion plan to accelerate growth, according to its Chief Executive Officer Eckhard Cordes.
China's first Media Markt electronics shop will open in Shanghai after the world's third-largest retailing group and its Media-Saturn division set up a US$200 million joint venture with China's Foxconn Technology Group.
During the next two years, another 10 Media Markts are due to open in Shanghai before more than 100 outlets open nationwide by 2015.
Introducing Media Markt underscores Metro's beefed up expansion plan this year after the company boasted significant growth from Asia. The group plans to boost investment by a quarter to 1.9 billion euros (US$2.34 billion) this year to fund 100 new stores worldwide.
"Internationalization is one of the focus strategies for our group," said Cordes, "We will put a lot of investment into East Europe and Asia and the biggest chunk will go to China."
Besides Media Markt, the group's biggest division, Metro Cash & Carry, which has 44 outlets in China, will open its 50th store by the end of this year. A new smaller-sized grocery store designed for downtown areas will also be launched in Shanghai later this year as a pilot program.
The entry of Metro's Media Markt will further intensify competition with Gome Electrical Appliances Holdings Ltd, Suning Appliance Co and Best Buy. The electronics retailers are banking on more affluent Chinese consumers and robust economic growth to grab a bigger slice of the market.
Suning, the nation's biggest home appliances retailer, wants to add 200 stores this year to its existing 941 outlets. Gome plans to open 80 new stores. It has 700 now.
Best Buy, the world's largest electronics retailer, has opened six stores in Shanghai since it entered China in 2006.
"There is still room for Media Markt as the consumer electronics market is huge and changes quickly," said Luo Qingqi, senior director of Pully Consulting.
"Foxconn's strong production capability will bring it good price competitiveness but the biggest challenge is how to find suitable store locations at a suitable property cost."
Industry analysts said international retailers are lagging behind domestic rivals in China mainly because of their limited product offerings, market penetration and high product prices.
China's first Media Markt electronics shop will open in Shanghai after the world's third-largest retailing group and its Media-Saturn division set up a US$200 million joint venture with China's Foxconn Technology Group.
During the next two years, another 10 Media Markts are due to open in Shanghai before more than 100 outlets open nationwide by 2015.
Introducing Media Markt underscores Metro's beefed up expansion plan this year after the company boasted significant growth from Asia. The group plans to boost investment by a quarter to 1.9 billion euros (US$2.34 billion) this year to fund 100 new stores worldwide.
"Internationalization is one of the focus strategies for our group," said Cordes, "We will put a lot of investment into East Europe and Asia and the biggest chunk will go to China."
Besides Media Markt, the group's biggest division, Metro Cash & Carry, which has 44 outlets in China, will open its 50th store by the end of this year. A new smaller-sized grocery store designed for downtown areas will also be launched in Shanghai later this year as a pilot program.
The entry of Metro's Media Markt will further intensify competition with Gome Electrical Appliances Holdings Ltd, Suning Appliance Co and Best Buy. The electronics retailers are banking on more affluent Chinese consumers and robust economic growth to grab a bigger slice of the market.
Suning, the nation's biggest home appliances retailer, wants to add 200 stores this year to its existing 941 outlets. Gome plans to open 80 new stores. It has 700 now.
Best Buy, the world's largest electronics retailer, has opened six stores in Shanghai since it entered China in 2006.
"There is still room for Media Markt as the consumer electronics market is huge and changes quickly," said Luo Qingqi, senior director of Pully Consulting.
"Foxconn's strong production capability will bring it good price competitiveness but the biggest challenge is how to find suitable store locations at a suitable property cost."
Industry analysts said international retailers are lagging behind domestic rivals in China mainly because of their limited product offerings, market penetration and high product prices.
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