Mon, Mar 28, 2011 page11

• Western do-it-yourself outlets retreat in China

  • AFP, BEIJING
  • • 
    • 
    • 

  At a near-empty B&Q home improvement outlet in Beijing, much of the foot traffic is owing to the location of a public toilet next to the entrance — not the store’s patio furniture or circular saws.

  It’s a sign of how foreign “do-it-yourself” big-box chains have struggled to attract customers in China, where homeowners have little experience in renovating apartments and prefer to pay low-wage decorators to do it for them.

  “Do-it-yourself is not popular in China,” China Market Research Group managing director Shaun Rein said. “The feeling in China is that if you do it yourself, that means you are a peasant — not the sturdy, manly image DIY chains have crafted in the US.”

  

  A woman carries a child on her back as pedestrians cross a footbridge overpass in front of a B&Q DIY shop in Beijing on Thursday.

  Photo: AFP

  Despite China’s booming property sales and a home--improvement market growing 15 percent a year and worth US$100 billion in 2009, such chains have been forced to pare back operations in China — or leave the country altogether.

  UK-based B&Q, whose Web site describes it as “the market leader in China,” entered the Chinese market in 1999, but in 2009 abruptly closed 22 of its 63 stores.

  Meanwhile, US giant Home Depot, which entered China in 2006, has shuttered nearly half its -outlets, leaving it with just seven.

  The latest casualty of the tough Chinese home-decorating market is French construction group Saint-Gobain, which said this month it had closed all of its La Maison building material stores.

  Analysts said overseas executives mistakenly assumed they could replicate the Western big-box model in China, where many people are renovating for the first time and have little experience using power tools.

  “A lot of apartments in China are concrete boxes and have to be decorated from scratch — very few homeowners know how to do that themselves,” said Zhou Wei, chief financial officer of advertising agency Charm Communications.

  These foreign retailers have also stocked products such as garden hoses, picnic tables and barbecues — poor sellers in a country where people live largely in apartments with no balconies.

  Rein said that on some of the few DIY items that do sell in China, both B&Q and Home Depot priced themselves out of the local market by charging much more than Chinese competitors.

  In the Beijing B&Q store, bored sales assistants far outnumbered customers. An employee said this was normal for a weekday, but it was busier at the weekends — thanks to the smelly public toilet.

  One of the shop’s few customers, a man surnamed Ding, said he wanted to buy “important items” like pipe fittings for an apartment he was renovating, as he believed they would be better quality at a foreign outlet, albeit more expensive.

  For everything else, he said he would get an interior designer to buy at Chinese stores where prices would be cheaper.

  Home Depot spokesman Ron DeFeo admitted the company had made mistakes since entering the Chinese market more than four years ago and had since “learned a lot.”

  “Our stores were modeled after the US market and its DIY format, but China is more of a DIFM [do-it-for-me] market,” DeFeo said.

  Another problem, according to Saint-Gobain spokesman Nicolas Nie, is that more and more homes sold in major cities such as Shanghai are already decorated, reducing the “prospect to serve individual customers.”

  B&Q did not respond to requests for comment.

  Foreign home-improvement stores are not alone in their struggle to find the right formula for consumers in the country of more than 1.3 billion people.

  US toy maker Mattel this month shut the world’s first and only Barbie concept store in Shanghai, while US consumer electronics giant Best Buy abruptly closed its self-branded stores last month.

  Analysts said some overseas companies have been left in the dust by Chinese rivals who have opened more outlets across the country, secured better locations and enjoy stronger bargaining power with local manufacturers.

  However, some firms such as Swedish furniture giant Ikea appear to have found the right mix — it plans to more than double its number of stores in China from the current eight by 2015.

  Zhou said Ikea had adapted to the local market by giving novice home decorators examples in its stores of living room, bedroom and kitchen styles suited to Chinese apartments.
• Most Popular

  • 1

    Air quality to deteriorate nationwide from tomorrow

  • 2

    Taiwan conflict ‘catastrophic’ for China: US report

  • 3

    Bucks defeat Hornets in final seconds

  • 4

    Taiwan closely monitoring Venezuela developments

  • 5

    Paris sees first derby in almost 36 years