Home Depot in China: It’s Complicated.

Home Depot recently closed its last Beijing store and the media has mostly ascribed Home Depot’s China problems to a lack of a Do It Yourself (DIY) culture in China. Though I do not doubt that China acks such a culture, I am not convinced that is the reason for the Beijing store closures.

I have read a number of books/articles on China’s consumer and retail culture and I have engaged with many experts in the field and all that allows me to make one point and one point only: China retail is complicated. My law firm has clients successfully selling products in China that I would have thought had absolutely no chance of success and we also have clients that have failed in China with products everyone thought were sure winners. Like consumers elsewhere, China’s are fickle, mercurial and unpredictable.

Back to Home Depot.

There could be a million reasons for its failure in Beijing and the analysis ought not to ignore that it still has six stores in Tianjin.  Are those six stores making money? Is Tianjin really that different from Beijing? Did the Tianjin stores “make it” because they are more clustered, making for better distribution or better name recognition?  Who knows? I sure don’t.

Yet at the same time, I persist in thinking there is some lesson to be learned from Home Depot’s Beijing failure, I am just not yet sure what.

What do you think?

Read More

China Business