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LAOX, Media Markt said to enter China retail market

By Nie Peng (chinadaily.com.cn)
Updated: 2010-05-18 16:51
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Japanese electronics retailer LAOX Co and Media Markt, part of Germany's largest retailer METRO AG, Monday announced that they would open stores in Shanghai, adding even more heat to the fierce competition in the domestic market, the Beijing Business Today reported.

LAOX announced it plans to enter the Chinese market in June, launching the first store in Shanghai, and open another two in the country in 2010.

Last year, Suning Appliance Co, China's biggest electronics retailer by market value, bought a 27 percent stake in LAOX, becoming its biggest shareholder.

Following the acquisition, LAOX reduced the number of its stores from 31 to 5 by closing the stores that suffered losses, the report said.

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LAOX is likely to make the first turnaround from losses in a decade as it predicts a net profit of 200 million yen ($2.2 million) for the fiscal year of 2010, according to the report.

Separately, Media Markt, Europe's largest retailer of consumer electronics, said it will open its first China store in Shanghai through cooperation with Foxconn Technology Group, which makes iPhone for Apple Inc, the paper said.

Recently the Shenzhen-based motherboard manufacturer made news headlines again as it saw its ninth employee jump to death in half a year on Saturday.

Media Markt said it chose Foxconn as a partner in the light of its manufacturing experience and familiarity with the Chinese market.

He Yangqing, vice president of Gome Electrical Appliances Holdings, China's No 2 electronics retailer by market value, told the paper that he didn't see the new moves as a threat to domestic retailers, which have an upper hand in sales networks over their foreign rivals, according to him.

Beijing-based Gome, with the most stores of any electronics retailer in China, said its net profit rose 34 percent year-one-year to 1.4 billion yuan in 2009 after closing unprofitable stores and renovating outlets.