Q: Why did you choose to open a store on Jinxiu Road in Pudong?
A: This will be our second store opening in Shanghai, after launching our flagship store on Huaihai Road in November. Jinxiu Road is in the middle of a residential area in Pudong, and we believe this kind of location is ideal for Media Markt’s further expansion in China. It is easily reached by car or public transportation. Our strategy is not only about opening big stores in the center of the city, but to be as close as possible to consumers. We want to be near individuals when they are thinking about consumer electronics, and when he or she wants to find out how to use certain innovations. This is important since our business model is based on a “touch and try” strategy.
Q: Has your “touch and try” sales strategy worked in China so far?
A: The strange thing about starting this concept in China is that we always get the same questions. They say, “This is not possible. How can you show real products that you can touch, try and use? People will break it down, tear it apart. You cannot do it in China.” This is not the case. Customers love touching the products – just take a look at our Huaihai Road store. Every day people are bringing in their own lenses to try with our cameras. The best thing you can offer consumers when they are interested in buying products is the opportunity to try them out and talk over their potential purchases with sales representatives. We are not here to sell eight brands, we sell all the brands. And our sales staff are trained to help people find the right product. Sometimes a knob or button breaks off of our demonstration projects – of course, it happens – but we just repair it.
Q: How has business been at your first store on Huaihai Road?
A: We’ve been very happy with the results. Sales traffic has been meeting our expectations. You won’t mind if I do not share figures with you, as it’s not our habit to do so. But generally speaking, so far we are very happy with our results in terms of the number of people visiting our stores, and the number of people who are returning and buying products.
Q: Media Markt launched an advertising campaign offering to honor warranties on products bought from closed Best Buy stores. How will this work?
A: We offer consumers who bought products at the closed stores the opportunity that if they have a warranty issue, they can come to Media Markt and we’ll take care of it. This means that if repairs are required, we handle it. The customer doesn’t have to call a supplier; we handle the whole process – from the logistics, to when it’s ready for the customer to pick up. The same applies to computers; we do a significant number of software installations. We ease your mind; we just want to help you.
Q: What do Best Buy’s closures in China mean for Media Markt?
A: We are here with a long-term plan. Before launching our first store in China in November, we had already brought Media Markt to 17 other countries. We do not start our business to stop, but at the same time we don’t know what lies in the future. The reason we are in China is because the market is prosperous. The growth in consumer spending – in terms of the product groups that we market – was over 25%. And from that perspective, we decided to join the Chinese market. Regardless of whatever changes happen on a daily basis, our attitude towards our expansion plan doesn’t change.
Q: How does Media Markt differentiate itself from Best Buy and other electronics retailers?
A: The most important element of our business model is that stores are run by people who decide on their own operations. Our store director for the Media Markt Jinxiu store is Sara Zhang, and she decides product supply, prices, promotions and staffing. That is our differentiator from not only Best Buy, but also all the other consumer electronics retailers in the world. We believe in this concept – we are so strong in the markets where we have overcome the starter problems that every country poses, because of this decentralization and localization strategy. Europeans are by far the minority in our company – they are here to help start up the business, but daily operations are run by Chinese people.