Electronics and appliances retailer Best Buy Company, Inc. will open its first Best Buy-branded store in Shanghai. The store will occupy four floors of the Jiang Shan Building in the Xu Jia Hui commercial area of Shanghai, the city's premier shopping district.
"With our first flagship store in Shanghai, we hope to enter the market in a way that enables us to learn about China's diverse consumers," said Al Lenzmeier, Best Buy's vice chairman. "Local business leaders, with keen customer insights, will be hired to manage the store. We believe that this venture will become an important part of our strategy to develop controlled growth opportunities internationally."
Consumer electronics sales in China are projected to be nearly U.S. $85 billion in 2006 and are forecast to grow in the double digits for the next decade. Best Buy already operates three sourcing offices in China, in in Shanghai, Beijing and Shenzhen, and has established relationships with manufacturers seeking broader distribution in both China and North America.
"We view a greenfielding strategy (growing by opening new stores) as an opportunity for profitable growth in this market," said Weimin Lu, chairman and general manager of Best Buy China. "As Best Buy learns more about serving the Chinese consumer, we also expect to consider strategic investments of a manageable size in China."
Best Buy will purchase approximately 8,000 square m (approximately 85,760 square feet) in the Jiang Shan Building.
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