How Can Foreign Capital Business Go Through That Road?

Best buy was defeated, home depot pulled out of Beijing, B&Q weighed...

China's huge market allows foreign capital to flock, but the business model that has been tested frequently abroad is sometimes unacceptable in the Chinese market.

The Chinese market is like a big fish with "meat", but it doesn't eat the right way, and it may get stuck.

Bleak out

When the domestic retail enterprises have introduced the new year and the next 5 years of vision, the world's largest household appliances.

In the end, the shopping environment, which is known as the so-called shopping environment, is still not affordable by local retailers. The seemingly beautiful "buyout" model failed to win the "financial model" that the local retailers explored. In the sixth year, best buy had to make such a tough decision to close all its own brand stores in the Chinese market.

Best buy is not the first to taste Chinese money.

B&Q is similar to Home Depot's fate, and is another foreign brand playing tragic drama in the home building materials industry.

B&Q, the world's third largest building material giant, has set off a storm in the Chinese market. At the same time, nearly half of the stores that still insist on doing business have reduced the area.

In 2004, China released relevant restrictions on foreign retail entering the Chinese market in accordance with the relevant commitments to join the WTO. In 2008, the Ministry of Commerce put the approval authority of foreign retailers in the provincial business department.

With the favorable policies and the "good side" of the Chinese economy, the development of foreign retail in China has been showing an expansion trend, and many retail enterprises regard the Chinese market as the focus of strategic development.

However, the shock of foreign retail sales has brought a waking up to the international giants who bet on the Chinese market.

The business model.

For the failure of best buy (China), it has been attributed to 7 crimes: no price pragmatism, value-added services, lack of late tracking, neglect of the buying habits of Chinese consumers, and neglect of business models of competitors.

For the dismal operation of home depot, it was attributed to the lack of geographic location of the store. Some industry experts believe that China's market for building materials and home furnishings is not standardized.

For B&Q's urgent downsizing, the DIY concept and the "design + retail" model are most criticized.

First of all, the goods provided are difficult to match with the home building materials market, while Chinese consumers do not like to buy home building materials.

As we all know, foreign-funded enterprises are cautious in their style of action, and will make adequate market research and analysis before entering the Chinese market.

Specifically, the acclimatization of best buy, home depot and B&Q in the Chinese market is in the final analysis of the business model that has been formed in the international market, and is not fully aware of the current market situation in China.

Chinese consumers are more sensitive to the price of commodities, and prices are crucial to market prying.

While emphasizing the so-called service and experience, we can only meet the narrow income group with high income.

In addition, China's circulation environment is in the period of rapid development and pformation. Under the situation of supply exceeding demand, retailers and suppliers have more power to speak, and they can increase their profits and lower commodity prices to maximize their market share by pferring operating costs.

However, the business models formed under foreign developed market rules may have more development prospects, but if they do not suit local conditions, there will inevitably be adverse reactions.

In this regard, the localization strategy of KFC and new world is worth learning from.

Nirvana in fission

Will foreign retail businesses choke on the Chinese market? Of course not.

How to turn around foreign retailers in the rapidly developing Chinese market has become a hot topic for retail giants.

At this moment, it is possible to find inspiration for eBay, the world's largest e-commerce platform, in the ups and downs and survival laws of the Chinese market.

{page_break}

It was very similar to best buy and Home Depot's access to the Chinese market. In 2002, eBay entered the Chinese market through its stake in eBay.

In the face of China's just starting e-commerce market, eBay believes that this is a battle that can be easily won, and the outcome can be seen from the beginning of war.

As the founder of the "C2C" model in the online marketplace, eBay also charges the display fees and trade commissions by providing free trading platform to individuals, which in the Chinese market also naturally promotes this seemingly perfect business model.

However, Ma Yun and his Taobao through the free C2C platform mode, let eBay's chariot stop in the Chinese market, a large number of small and medium-sized sellers gathered on Taobao platform.

In the face of the market being quickly snatched away by Taobao, eBay chose to retreat, which closed its Chinese website in 2006 and turned the 51% stake in eBay to TOM.

However, eBay did not abandon the Chinese market.

China's large number of online sellers to expand the demand for foreign trade business, so that eBay found a breakthrough in the market.

Because sellers can reach terminal consumers on the eBay global platform, and get higher profits by shortening the trading process.

EBay global CEO John Donaho, who showed up in Taobao last year, made it clear that eBay will take China's export business as the focus of its sustainable development.