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| A Media Markt store in Shanghai. The electronics products chain has announced it is withdrawing from China due to fierce competition. Jing Wei / For China Daily |
Media Markt China Ltd, the electronic products chain owned by Germany's Media-Saturn Holdings and Foxconn Technology Group, will close its seven Chinese stores on March 11, a senior company official said on Wednesday.
The move marks the end of the company's two-year foray into the Chinese market.
Frank Bussalb, chief executive officer of Media Markt China, said that the closures of the stores were in the best interest of the two shareholders.
The company's store on Shanghai's Huaihai Road will remain operational to serve as a customer service center before closing its doors for good in late April.
All of the company's stores are in Shanghai.
Metro Group - Media-Saturn's parent company - said in a mid-January statement that it was planning to withdraw further financing for a planned expansion of the Chinese business.
Media Markt entered the Chinese market in November 2010. It was expected to open more than 100 stores across China by 2015.
"The decision to close the stores was made in response to the highly competitive market environment and associated high investments to build an operation of the necessary scale," said Bussalb.
Media Markt's exit from the promising but elusive Chinese market reminds industry insiders of Best Buy Co Inc's departure a couple of years ago.
The electronics retailers' disappointing experience in China highlights just how difficult it is to build a new retail brand in the country, especially in the consumer electronics space, said Ben Cavender, an associate principal at the China Market Research Group.
There is a tremendous amount of competition from well-established domestic brands and consumers' attention is shifting very rapidly to other shopping channels, like the Internet, Cavender said.
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