“We cannot cover Shanghai with advertising”
In autumn, Media Markt and its Taiwanese joint venture partner Foxconn want to open the first branch in one of the most popular shopping streets in Shanghai. By 2012 around ten more markets are to follow under the Chinese name “Wan de cheng”, the city of unlimited possibilities.
Mr. Weise, you already work in 16 European countries. Why China now?
ROLAND WEISE: There has been substantial growth in China in recent years and it will continue to grow. In addition, China is not only a consumer, but also a developer. We have our finger on the pulse when we are here and detect technological developments at an early stage.
What’s your strategy?
WISE: We’ll start in Shanghai. The city alone has purchasing power like Austria or Switzerland. Then we will see. There are so many cities with more than five million inhabitants, but we want to learn in Shanghai first.
There are already many competitors in the market, for example Best Buy from the USA or Gome, the largest Chinese chain for consumer electronics. How do you want to set yourself apart from them?
WEISE: We know Best Buy very well, with their first two stores they are our competitor in Turkey. You have a very American concept. But I don’t get the impression that their stores in Shanghai are the best. We are set up differently in our assortment mix. Gome does not present according to product groups, but according to company islands. For example, they sell Philips, but not white goods. We, on the other hand, want to offer our customers an objective choice.
We need qualified staff for this. Finding that in bulk is extremely difficult in China. In addition, employees often change very quickly for a slightly higher wage. How do you plan to find and keep your staff?
WEISE: We have already seen this phenomenon in Russia. But we invest in our employees and train them. This is our chance. We want to make this “on the job” training just as successful here. In Russia, our fluctuation is far lower than that of our competitors. When we opened our first store there, we didn’t have any products on the flyer, but 120 employees. That made a big impression. The Chinese are good traders and entrepreneurs, otherwise the country would not have developed so quickly. We have to find this entrepreneurial spirit.
In Germany, Media Markt and Saturn made headlines with very aggressive advertising aimed at price. Will that also work in China?
WISE: We will have a different focus. We cannot cover this big city of Shanghai with advertising, we have already seen that in Istanbul and Moscow. We rely on word of mouth. Nothing is more convincing than performance. Of course we have to underpin this with campaigns and advertising messages. People will soon be talking about us in Shanghai too, we’ve managed that everywhere so far.
Frank Hollmann asked the questions.