Examples of the challenges of variations in merchandising and pricing needs are manifest in The Home

Examples of the challenges of variations in merchandising and pricing needs are manifest in The Home Depot and Best Buy, which are now heavily damaged brands in China. Media reports have postured that China lacks the project-oriented customer that The Home Depot has targeted elsewhere. Julie Harris, Global Managing Director of research and forecasting firm WGSN, forcefully echoed this verdict in webzine Mashable. “People don’t have homes to invest in in China; homes are small, not spaces to invite your friends and display your wealth.” Selling online is not going to change these unfavorable demand patterns for The Home Depot. For Best Buy, on the other hand, the problem is not lack of demand, but fierce local competition, especially from heavy-weights Gome and Suning. The latter has been consistently able to undercharge Best Buy. More problematic for Best Buy’s turn to e-commerce, their big Chinese rivals already boast strong e-retailing capabilities. As a Johnny-Come-Lately to the Chinese e-retail game, the time for Best Buy to gain substantial online market share may have past. The situation is quite different for big-name Western fashion retail brands. Jiao Tong’s Wei sums up the contrast. “In consumer electronics, Chinese consumers are more price- and less brand-conscious, and will purchase cheaper local offerings; however, in fashion they want the real Western deal, and, unlike most electronic gadgets, acceptable local brands don’t exist,” Wei says. Over the next decade, many of these consumers will be living in Western Chinese lower tier cities, where land-use issues make building new mega-malls difficult. This offers a huge new opportunity for Marks & Spencer, but exploiting it requires adopting an e-commerce strategy that maintains the brand’s integrity. In this regard, the British retailer may be better off focusing on selling through its dedicated Chinese site. In Walmart’s case, it is well positioned to cash in on China’s e-commerce gold rush. But while it has beaten other MNC general merchandise retailers to the punch in partnering with Yihaodian, Walmart will find the digital ‘Shangri La’ a very crowded place. As Diaz noted, China e-commerce entry barriers for smaller, specialty product retailers are becoming less of an issueSeveral U.S. retailers, including such major players in the market like Walmart, Best Buy and MacMall, began to cut prices on tablets Apple. For example, Best Buy almost reduce 30 percent of the cost of the new iPad. Now it can be purchased for U.S. $314.99 (16 GB version) or U.S. $384.99 (32 GB).
The usual cost of these models are 449.99 and 699.99 dollars respectively, so that the discount is a more than significant. Besides discount prices on models supporting 3G. At the same time, Walmart and MacMall reduced the price of iPad Mini. Rather, retailers are trying to ONDA Tablet  sell off the remains as the current generation of tablets Apple is coming in the near future. While on this subject are no official figures, but the behavior of retailers can say that the release of iPad 5 and iPad Mini 2 will take place very soon.
Mainly because Taiwan-based notebook ODMs have been accelerating the process of shifting production to plants in Chongqing and Chengdu, in western China, the factories of ODMs and component makers in the region are seeing increasing difficulty recruiting enough workers, according to Taiwan-based supply chain makers.
    Since the ODMs and related upstream suppliers are already facing labor shortages during the slow season (the first half) of 2013, the sources are concerned that the shortages will become more serious in the second half.
    Acer’s 7-inch entry-level tablet is also suffering from unstable supply due to a labor shortage at component suppliers.
    Quanta Computer plans to move all its notebook production except those for Apple, to its plants in Chongqing in 2013. Compal Electronics will shift 90% of its notebook capacity to Chongqing plants and will expand capacity in the second quarter.

    imageSince people in western China are less willing to work in factories, the governments are mainly pushing student workers to aid the IT firms. Currently, about 50% of IT firms’ workers in Chongqing are students, and in Chengdu the proportion is 60-70%, the sources noted.

    Since students in western China are required to conduct internship activities at factories in order to graduate, the governments can easily mobilize a large number of student workers to help IT firms. However, student workers’ high rates of absenteeism is causing the makers difficulties managing their production line manpower.

    In addition, recruitment competition will also become a serious issue as the makers will need to offer attractive packages to draw people’s attention, but it will impact their profits, the sources said.


    Hewlett Packard’s better practices which could be a model for others in the electronics industry [1:00 – 3:50], see also the related written report:

    The factory [with 14,000 workers], in Chongqing, makes computers for Hewlett-Packard, a company with little of ONDA Tablet pc  Apple’s glamour. It is operated by Quanta, a little-known Taiwanese manufacturer.
    …
    Neither Quanta nor Hewlett-Packard claims it has solved every labor woe. And the amenities are partly selfish: one of the biggest problems for Chinese factories is that workers are constantly leaving. Hewlett-Packard hopes that by improving living conditions, turnover and training costs will fall.

    What changes Foxconn has made, and what challenges lie ahead as Foxconn and Apple say they are trying to improve working conditions? [4:23] See also the other parts of the related written report, Signs of Changes Taking Hold in Electronics Factories in China [The New York Times, Dec 26, 2012]:

    With 1.4 million employees in China — the most of any private company — Foxconn is setting a bar that all manufacturers will be judged against, say executives at other companies.

    “When the largest company raises wages and cuts hours, it forces every other factory to do the same thing whether they want to or not,” said Tony Prophet, a senior vice president at Hewlett-Packard. “A firestorm has started, and these companies are in the glare now. They have to improve to compete. It’s a huge change from just 18 months ago.”