Hon Hai Technology Group (鴻海集團) yesterday confirmed that consumer electronics product retailer Media Markt China (萬得城), in which it owns a minor stake, would shut down its business in China next month.
The closure would not affect Hon Hai’s retail expansion in China, the firm said.
Hon Hai’s comments came after Media Markt China announced on Wednesday last week that it would be closing seven stores on March 11 and that it planned to shut down its Media Markt store in Shanghai on April 30, according to a company statement posted on its Web site.
The Germany-based Metro Group is a majority shareholder of the consumer electronics retailer.
“The decision to close the stores was made in response to the highly competitive market environment and associated high investment needed to build an operation of the necessary scale,” Frank Bussalb, chairman and chief executive officer of Media Markt China, said in a statement on behalf of the board.
As part of the closure of the Media Markt China operations, Hon Hai is working with Metro Group to ensure that all of the commitments that have been made to that company’s stakeholders, including customers, vendors, and in particular the firm’s 750 employees, would be handled responsibly and according to regulations, Hon Hai said in an e-maiiled statement sent yesterday.
“While we are disappointed that this joint venture was not successful, Hon Hai remains committed to retail marketing as part of our overall investment strategy in China,” the statement said.
Hon Hai “will continue to explore other opportunities that may include the integration of both physical stores and e-commerce in a future retail market offer,” it added.
Hon Hai said early this year that it planned to accelerate the expansion of its retail stores of its electronics retailing subsidiary CyberMart (賽博數碼) in China and Taiwan.
Shares of Hon Hai Precision Industry Co (鴻海精密), the flagship company of Hon Hai Group, dropped 0.12 percent yesterday, under-performing the TAIEX, which gained 0.84 percent.