Best Buy’s China subsidiary begins selling online
September 10, 2014 03:06 PM
Jiangsu Five Star Appliance Co., the China subsidiary of U.S. consumer electronics chain Best Buy Co. Inc., has begun selling online.
Five Star, as it’s widely known, launched last month its own e-commerce site, 5star.cn, and plans to sell through a variety of online channels. The company says it plans to open web stores on popular Chinese online marketplace such as Alibaba Group Holding Ltd.’s Tmall.com and Amazon.cn, the China site of Amazon.com Inc.
In addition, Five Star says it plans to join forces with cable TV provider Jiangsu Broadcasting Television Network Corporation Ltd. to sell products via TV program and a mobile app.
In addition, Five Star, which says it is the third-largest consumer electronics retailer in China, plans to partner with independent shops in small cities as a bid to outflank its two larger competitors, Suning Commerce Group Co and Gome Electrical Appliances Holding Ltd. The Best Buy unit aims to sign up small electronics retailers as affiliates who can fill customer orders through 5star.cn when they don’t have in stock the item a shopper wants.
“We focus on smaller cities or towns and want to form partnerships with electronics store owners in villages,” says Five Star CEO Zhou Meng. “5star.cn will help them offer a bigger selection to their consumers and increases their sales. We plan to recruit 500 to 1000 affiliate stores by the end of this year.”
5star.cn mainly sells electronics goods, such as mobile phones, but the site plans to add more categories, including cosmetics products, the company says. The site works with Chinese delivery company SF Express.com Co. Ltd. to offer free shipping for orders above 99 yuan ($16).
Founded in 1998, Five Star Appliance operates more than 200 stores in China, far fewer than Suning and Gome. The Nanjing-based company has 23,000 employees and its annual sales exceed 20 billion yuan ($3.23 billion), Five Star says.
Best Buy spent $184 million to acquire Five Star Appliance in 2006. Besides the United States and China, Best Buy also operates in the Mexico and Canada, the company says.
Suning is No. 2 in the 2014 Internet Retailer China 500, Amazon China No.4 and Gome No. 7. Best Buy is No. 15 inInternet Retailer’s Top 500 Guide.