Exporting retail brands can be tough sell
Saturday, February 26, 2011
Best Buy's retail magic apparently doesn't translate into Chinese.
Dave Brennan, co-director of the Institute for Retailing Excellence at the University of St. Thomas Opus College of Business, warned nearly three years ago that Best Buy may be overstepping its reach. He and a colleague, Lorman Lundsten, had studied the failed global expansion attempts of Wal-Mart. "They went too far too fast in too many areas," Brennan said at the time.
The professors concluded that Wal-Mart's strategy to get the lowest price from vendors couldn't always work in foreign countries.
There is also an active black market that undercuts what retailers can charge, Brennan said.
Brennan said household products, such as appliances, are much smaller by U.S. standards because of cramped living quarters. He said Chinese consumers also value price over quality.
"They would rather trade down rather than trade up," Brennan said.
Originally published: 02/26/2011, Star Tribune