As Best Buy’s ‘Five Star’ exits China, more foreign retailers jump in

As Best Buy’s ‘Five Star’ exits China, more foreign retailers jump in

Staff Reporter


Foreign electronics retail giants such as Best Buy and Wonder City have repeatedly faced setbacks in China, but this hasn’t extinguished their enthusiasm as RadioShack approaches the mainland market, IT Times Weekly reports.

On March 18, consumer electronics retail giant Best Buy announced that Wang Jian, president of Five Star Appliance, its wholly owned subsidiary in China, will leave his post, though he will continue as a senior adviser for a smooth transition to help the new leadership until the end of June.

Wang’s departure means Best Buy’s “Five-Star era” has come to an end, as the subsidiary it bought in 2009 didn’t satisfy the parent company, insiders said. Best Buy will have to rethink its development strategy in China.In February, Wonder City, the joint venture between European electronics retailer giant Media-Saturn and Taiwan’s Foxconn Technology Group, announced it would close its seven stores in Shanghai. When Wonder City launched in November 2010, it announced it would invest US$200 million within two years to set up more than 10 stores in Shanghai, and planned to expand its stores to the whole China by setting up more than 100 outlets.

Nonetheless, RadioShack, the second-largest US electronics retail brand, recently said after a test run in China for one year that it would set up 500 stores in China within three years, introducing its convenience store model into the mainland.

Costco, the third-largest US retailer, also plans to enter China via its e-commerce division. Macy’s Department Store also decided to enter the Chinese mainland market, the report said.

Five-Star’s Wang denied speculation that his resignation was because of problems with Best Buy’s management and slowing sales growth, saying he quit for personal reasons. Wang’s remarks should not be taken at face value however, according to the report. Last year, Five Star announced it would open 50 new stores within a year, but as of the end of last year, it had opened just four, bringing the total to 213 stores.

Best Buy’s 2013 revenues reached US$49.62 billion, down from US$50.04 billion a year earlier. Its latest quarterly report showed its international sales in the quarter fell 6.6% from a year earlier, chiefly due to declining sales in Canada and China, the report said.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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