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Media Markt closes all Chinese stores

cctv.com | Updated: 2013-03-13 14:10

Europe's biggest retailer of consumer electronics, Media Markt, has closed all its stores in China. The company had tried to replicate its European success in China. But it didn't work primarily because of cost pressures.

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Media Markt closed all of its seven Shanghai stores on Monday, but some customers still came by hoping for closing-down bargains. They weren't even let in the door.

Customers said, "If there were people there, they seemed to be just looking. Because the tills were always empty, so I don't think it is ever doing very well."

"It is really a pity. Media Markt had more types of electric appliances than anybody else."

Like its foreign counterparts such as Best Buy, Media Markt allowed hands-on try-outs for its products and plenty of customer service. But one expert says that kind of service doesn't always work well in China.

Zhang Huiming, professor from Fudan University, said, European consumers are more focused on consumer experience, but in China, consumers care more about the price.

Low prices were another strategy the company brought in from the European market. It allowed consumers to ask for a refund within 15 days if they found that what they bought from Media Markt was more expensive than from other retailers. But that was far from the right idea in China, where retailers are in an almost constant state of price warfare.

Zhang said, "Gome and Suning have grown fast these years, and already had a large sales volume in the market. As a new comer, Media Markt had many fewer stores, which meant it could be less competitive on pricing. It could no longer take the cost pressure."

Media Markt took in 100 million euros ($130 million) in China sales during the first nine months of last year, but that revenue was less than 5 percent of Suning's, and the European firm lost 40 million euros in China for the year.

Previous reports

Media Markt China shuts down

Media Markt to close stores by end of April

Media Markt may shutter stores amid losses

Media Markt offers online shopping services

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