Media Markt's Exit from China
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Case Code: BSTR434 Case Length: 11 Pages Period: 2010-2013 Pub Date: 2013 Teaching Note: Not Available |
Price: Rs.300 Organization: Media Market Industry: Electronic Retailer Countries: Germany, China Themes: International Business, Globalization |
Abstract Case Intro 1 Case Intro 2 Excerpts
Farewell Media Market
In March 2013, Media Markt China Ltd. (Media Markt China), the Chinese arm of Germany-based consumer electronics retailer Media Markt , closed down all its seven stores in China, along with its Chinese headquarters in Shanghai. The move took industry observers by surprise, as Media Markt's parent company Metro Cash and Carry had been present in China for 14 years, and as Media Markt had entered China through a joint venture with Foxconn Technology Group (Foxconn), the largest contract manufacturer of electronics in the world.
Media Markt entered China in 2010, when US-based electronics retailer BestBuy was facing a tough time in the country. Metro, the parent company of Media Markt, and Foxconn entered into an MoU (Metro 75% and Foxconn 25%) to build and operate the consumer electronics group in China under the brand name Media Markt China. Foxconn, a well established company in China, was looking to make its presence felt in electronics retail through this venture, while Metro was looking to take advantage of the growth opportunities that China presented and extend its strategic position in the country.
Media Markt's first store was opened in November 2010 and the second in February 2011. The stores were huge compared to the stores of Chinese retailers, and allowed the customers to try out products. Customers did not have to face aggressive salespeople or bargain on price, as the prices were fixed. All the products were new; the company did not sell refurbished products, as some retailers in China did. The stores had a wide range of products, from mass market products to specialized brands. The first two stores experienced a huge response from the Chinese customers. Customer traffic and their interest in purchasing electronic goods from Media Markt were on a par with the company's expectations. The company planned to have 100 stores across the country by 2015....
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