Japanese home appliance retailer Yamada Denki will see a store in Nanjing, capital of Jiangsu Province, formally shut down on June 1.
It said in the afternoon on April 22 that the store in Nanjing performed not well due to a supply chain and logistics shortage and it had made a decision to formally suspend the business on June 1.
Available information shows that it saw the store start formal operation on March 22 last year and owning a building area of about 16,000 square meters, the store drew rising attention of the public at that time. And some industry observers even believed that it would deliver a strong impact on other home appliance retailers there. Prior to this, it had had a store in Shenyang, capital of Liaoning Province, and Tianjin, a port city in north China, each. In line with people in the circle, a major reason for it to shut down the store is that it fails to well satisfy the demand locally.
It will become the third foreign home appliance retailer to quit Nanjing after Best Buy and Media Mart and in line with industry observers, it has features but not a sharp edge in both size and price. The competition in the home appliance market of Nanjing is always fierce and about 500 meters far away from the store, there is a store by Suning Appliance Co., Ltd. (SZSE: 002024), one of the top two home appliance retailers in the Chinese market. In addition, there had been a list of other home appliance retailers including Gome Electrical Appliances Holding Ltd. (SEHK: 0493), a domestic archrival of Suning, and Fivestar, a wholly-owned subsidiary of leading global consumer electronics retailer Best Buy. In order to compete with them, it took move and even alleged that the price of all products sold in the store was lower than that of those sold through the Internet. However, the efforts worked not well and amid fiercer competition with not only home appliance retailers but also professional mobile phone retailers, it saw days be hard. It should have no other choice but to make such a decision.
An industry observer pointed out that homegrown Chinese home appliance makers had established a leading position in the domestic market and it was just the relatively high industrial threshold that stops foreign firms from establishing a strong foothold there.
It declined to make a comment on whether it would shrink in the Chinese market in an interview on April 23.
