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Best Buy, Inc. (NYSE: BBY) continues to remain dominant in the U.S. when it comes to large consumer electronics stores, but that doesn't mean that is ignoring other potentially lucrative markets. Six to eight new locations in the Shanghai area this year will help make China become its second largest market after the U.S., according to Best Buy International chief Robert A. Willett.
China's move up that important ladder will occur within three to five years. Best Buy already has a store in Shanghai and plans on a second in a "short period." In fact, Best Buy recently hired an exec dedicated just for picking retail location sites in Shanghai. Now, that means business!
Best Buy has been in China since 2003 but didn't launch its first store until nearly 18 months ago after much careful consideration about location. Best Buy's business in China can't match sales from its U.S. locations, but it is faster growing. Its Shanghai location has consistently ranked in the top 50 globally for sale revenue growth as well.
But it probably won't be easy for Best Buy to create the huge market it anticipates in China. Existing retailer GOME has recently focused on acquisitions at the same time Best Buy is delicately balancing relationships with Chinese vendors. Growing while keeping the balance happy will take time and considerable effort, but it'll pay off for Best Buy handsomely in the near future.
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