Home Depot Case Essay

1342 Words Sep 24th, 2012 6 Pages
9/15/12

Home Depot Learns Chinese Prefer 'Do‑It‑for‑Me' ‑ WSJ.com

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BUSINESS

Updated September 14, 2012, 5:52 p.m. ET

Home Depot Learns Chinese Prefer 'Do­It­for­Me'
By L AU R IE BU R KITT

BEIJING—Home Depot Inc., in deciding to close all seven of its remaining big­box stores in China after years of losses, joins a growing list of retailers who have stumbled in China by failing to grasp the local
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"You have to be nimble and willing to react quickly to changes," said Peter Lau, chairman of Hong Kong­based apparel retailer Giordano International Ltd., speaking at a retail conference in Shanghai this week. Mr. Lau said that he encourages regional and individual managers at his nearly 1,400 Giordano outlets on the Chinese mainland to create local marketing and sales strategies. The people on the ground know their customers better than employees in corporate head offices, Mr. Lau said. Home Depot is shaking up its strategy by focusing on specialty stores. Three months ago, it opened one paint­ and­flooring store and one home­decorations outlet in the northern port city of Tianjin to cater to specific needs and shopping preferences shown by Chinese consumers, the spokeswoman said. It also plans to launch online operations with a Chinese partner, she said, without naming the company. Home Depot debuted in China with a 12­store acquisition six years ago and the number has since dwindled as it found that Chinese consumers differ from their global counterparts. As Swedish furniture giant IKEA discovered, Chinese consumers will pay for people to do the work for them. Several years ago, the furniture store added services to help customers assemble their furniture.

Imaginechina / Associated Press

The retail giant, which entered China in 2006, plans to close its remaining big­box stores in the country. Above, a Bejing store in

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