Why Home Depot Failed In China
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- čas přidán 10. 06. 2019
- Home Depot bought Home Way, a Chinese home improvement company, in 2006. The acquisition marked the first time Home Depot had expanded beyond North America. With a booming economy and strong real estate market, China seemed like an easy win for Home Depot. Within six years, the company had closed all its stores in China.
In the 1990s, the Chinese government loosened regulations on the housing market, allowing its 1.2 billion citizens to own private homes for the first time since the Communist revolution in 1949. Home improvement and furniture companies like Sweden's IKEA and the U.K.'s B&Q rushed to meet the need.
In 2006, Home Depot bought the Chinese home improvement company Home Way, giving them 12 stores in the country. With its booming economy and strong real estate market, China seemed like it would be an easy win for America's home improvement giant.
But by 2012, Home Depot closed the last seven of its 12 original stores. The company doesn't break out sales data by country, but data from Euromonitor shows that China only accounted for about .3% of Home Depot's annual net sales. Analysts say that Home Depot failed to do its homework on the Chinese market, missing the mark on consumer needs and culture.
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Why Home Depot Failed In China
Home Depot: Lets sell products Made In China for twice the price that other companies in China sell it for.
So stupid start.
It's because in usa making even minimal improvements is $120-200 for one day of work to a guy painting one room. In china its probably $12
U.S.A. has alot of money, that is their only advantage
Gimme a kiss
@@CZcamsCZcams-hy4sl $12.. LOL, You could try here in China. 300-400 RMB(around $45-$60) a day now. For any skilled worker, not pure labor, their payment is growing fast.
Isn't this the story for all failed brands - "not understanding the culture"
Business 101 guys!
Sagar Roongta, the basic problem is that America's Big Business for the most part thinks like the Europeans before them (take them and mold 'em to OUR CULTURE). THAT DOESN'T WORK.
If they truly wanted to "stick American principles", they should stuck to this one: the Customer should always dictate what Business do, not the other way around, which is how true Free Enterprise should work.
Sagar- I think you hit the nail right on the head but it's crazy that such a large company could invest so much money without doing their homework.
I'm not not even a businessman (I'm a skilled tradesman) but based on the year I spent in Japan and South Korea while in the USN, DIY has the stigma of poverty and loss of face on it. I do disagree with that idea but the realities on the ground do not care what my opinion is. If you're successful in an Asian country, you do not dirty your hands.
Which is funny when you look at how much money Martha Stewart made cooking, gardening and interior decorating.
@@randomperson8695 What kind of tradesman?
Just waiting for some big ass consulting firm to use this video on their decks to say "see client, come to us for China advice". Just get your ass on ground, understand the country.. Can't just port stuff from east to west mindlessly
no. it is simply that the chinese people are too poor. china has even lower hdi(human development index) than thailand. the chinese don't have money to buy from home depot.
LOL my girl May Hongmei Gao is absolutely roasting Home Depot right now hahaha
I’ll note that IKEA in China prominently offers shipping and in-home assembly on signs in every section.
Shipping isn't China specific, Ikea offers the service in other markets too, the assembly service though might be China specific.
IKEA is related cheap and provide the combination with material + labor for installation
@@LouisSubearth
Assembly happens in Malaysia too.
There is a cultural aspect. If you have a problem you go see an expert. If you need to fix your house, you go see a home builder. If there is bathroom leak go see a plumber. If you are ill, you go see a doctor. If your car has trouble you go see a car mechanic. You see IKEA furniture, you pay for a guy to come an assemble your furniture. You do not attempt to fix it yourself. That is what experts are for. People who know what they are doing.
I think this has resulted in a difference in the US and Asia. Since Asians default to experts all the time, expert help is cheap because they have a lot of business. And since they are cheap, they are called all the time. In the US, since people do it themselves all the time, so experts have little work and thus charge a lot more. And since they charge so much, people learn to do it themselves.
@@nickl5658 speaking of vicious cycle.lol
Louis Subearth in China it is free after certain purchase
"Any companies going abroad, they need to pay attention to consumer mentality, consumer lifestyle, business environment and culture."
Chinese consumer are sensitive to two things, price and brand. You have to as least get one right. In Home Depot’s case, they failed in both.
I think thats the same for every consumer in the world at least when it comes to price. No one enjoys paying more, sure consumers in developed countries might be open to premium products that come with a premium prive moreso that those in developing countries but to be honest I've never heard someone complain that they paid too little for something. Price is a universal factor for every consumer. Brand on the other hand is a different story and I agree with you on that.
@@smks8er Correct, some western customers may love to pay a little more on premium brands/slightly better products, but it is only "a little more".
Yes it's much cheaper for them to buy the competitor's product that has been illegally subsidized by the government to put the Western company out of business. Now you can order form Mao's House of Faulty Faucets, Leaded Pipes, and Collapsible Building Supplies.
Easy! Because China has so much cheap labor around. The people can afford to hire helps, don't need to do it yourself.:-)
@@LaGloiredesLocaux But how much for a skilled plumber or electrician? A good one...
its also their culture though its not that its cheap to pay someone its that if you do it yourself youre apparently poor
@@Steven-yd8wy I think it's somewhat true. But when have others do for you is considerably more expensive then culture might be ignored. I bet most of Chinese who live in the West do it yourself too.:-)
@@ChrisGilliamOffGrid Recruiting a skilled worker like those you mentioned in China is getting more and more costly. Normally we negotiate with the contractor for an overall price, covering everything in a decoration project. The contractor told me he need to pay 300-500 RMB （45-75 USD）a day for a plumber. It varies depending on their experience and reputation.
Yes, just like the American cities of the 1920s, cheap labor was everywhere, the US cities were clean, fresh, safe, and the place to be... Home Depot only needs to wait 50 years or so for China's cities to follow the same path as the American cities of the 1960s and 70s when the poor moved in and the elites moved out. Then the demand for DIY work will be higher as the rich people (and a new middle class) buy their suburban homes in China. Its a social city cycle, not really a cultural thing.
[if you are willing to wait another 30-50 years or so, India will be following the same growth path as China]
they should changed their name to *Our Depot*
On a serious note, almost all of US businesses' failure in overseas can be attributed to their *failure to understand the target market*
U.S. companies are arrogant and think that their mere presence in another country is going to attract droves of loyal conusmers just because they're American companies.
Corporations think the rest of the world are 350 lbs Walmart shoppers riding scooters.
@@macgruber7948 Thats why they fail. They dont even bother to do research on the country and culture that they are targeting. That tells me that they think thy dont need a strategy because the mere mention of "American" should attract customers automatically.
Having lived in the US for several years I would love to see a Home Depot 30 minutes from my home.
@@macgruber7948 I can’t say for other countries but lots of American companies failed in China for getting in the ways of their Chinese executives doing their job. They generally don’t believe the Chinese they hired would run their company in China better than themselves. That’s exactly how eBay failed in China. eBay was the predominant online shopping site in China 15 years ago and where are they now? You can blame the government for some of american company’s failure like google for the ban but both Amazon and eBay have presence in China up until now. Both companies were the pioneers in Chinese market in their respective field and they both failed.
when you walk down a small street in china, you see small individual shops that specialize in tools and machinery. Why drive far away for a home depot ?
in their defense, it IS an American brand!
have you seen KFC. Nike and Starbucks over there??? and that's not even the knockoff stuff, like OFC, Nikke, and Starbicks! 😉
@@stueygriffith4671 Except as the video pointed out, those american brands were in malls close to city centers. Not a 90min drive away. The average Chinese consumer would rather hire a general contractor for very little money who would source all the parts and labor themselves
@@melissablick779 but you can't go wrong with a bucket of OFC chicken Christmas dinner, a 35mm Nikke to snap that perfect shot, or a TALL Starbicks to kick off the day! 😉
Some people, like myself, prefer big box stores over mom and pop places. Everyone is out to make money, but a big store can afford to take returns.
@@Robert-td1xm In most cases, mom and pop stores don't lose money on returns. Returned merchandise is typically sent back to the distributor and then the manufacturer.
imagine expanding your business to another country without understanding the business environment and culture... that's money thrown down the river
only American company that i can think of that did their homework and are thriving is KFC.
@h h china doesn't have that much land as the usa does. also those people in middle class are rather living in the cities because of convenience and lifestyle.
@@ipfreak China has plenty of land the just dont know how to use it. Look at satellite images of their towns and big cities and how they build. Government runs things and owning land and building is weird thing so only big money corps do it there. They all want downtown spot light. So much that they wont even build across the street. They waste land. I saw a documentary on it and maybe im not explaining well. But nobody in China will be like you see that free land over there imaa take it and build on it. Instead they bunch up socially in slums or apartments. In America we need our own space.
@@jerrydurantiii3360 that is very typical western propaganda! i know that in my personal experiences. people don't live on non-arable land. over 73% of china is on mountains, deserts. if you ever went to china and live for while, you will find how scarce land is over there. chinese people would use every inch of land you can imagine to grow food. that is why china is indisputable leader of agriculture technologies that grow food on saline-alkali soil, grow food in semi-desert land. land usership is private. so the useship would be compensated when development need on that piece of land. in china we call it "chai qian" and families get rich over night (of course created a lot of social issues) by compensations. in 1980s and 1990s, there were some issues due to corruptions, but in last 20 years, chinese government has been engaging anti-corruption campaigns and achieved good results. overall i think chinese government manage this model well.
@@ipfreak I'm not spreading any PROPAGANDA I'm sorry if you've been battered by a dictatorship government and I can see how how you would think an opposing view is what you call propaganda. I have no agenda. I'm just stating my view and how I see it as more than correct from what I saw. Now as far as complaining about your geography we have this rat packed state called California. Theres these things called movies people watch all around the world and in America most are made in Hollywood. Most people LIVE IN THE HILLS HERE. So quit crying. I feel bad for Chinese under communism oppression. But to say im spreading propaganda because your ignorance is not ok.
1. Home Depot lost the price war comparing to millions of competitors.
2. Chinese prefer to let the experts handle the specific problem. It's more efficient with a better result than DIY.
5:35 Ms. Gao recommends multi-national corporations do their homework by researching their potential consumers before expanding. Wow, what great advice! Thanks Ms. Gao!
lol
Honestly who does the research for Home Depot? How do you enter a market abroad without analyzing the market????
"Home Depot Can't Do it. We Can't Help" -- China
America too!
I remember studying cases like this in business school and this would make a great case study. It's so arrogant of companies to enter another market and assume the consumers will just behave the way they think they will. Do your research companies! Now I'm off to set up a chain of liquor stores in the Middle East, wish me luck 🍀
Good luck! And sell those pork sausages too. Pork is really popular in China and Europe so it would work very well in the Middle East too.
Nick L that’s a great idea mate thanks ha
@@jonny5777 ... no idea if you are the troll, instigating the troll, unaware of sarcasm, or playing along. Liquor is technically allowed in Islam ("alcohol is allowed in small quantities") but effectively banned ("what is allowed only in small quantities is forbidden"). Pork, however, is straight up banned - no amount is allowed.
jyashin seems like humour is also banned
Even here I have found Home Depot more expensive than local hardware stores.
in China, if a product is much cheaper than ikea, it's quality is definitely worse.
It is really very simple --- American companies demand high profit margins and will always fail at places with real competition!
us retail: let's resell all these Chinese made stuff at the same price we sell in America to tge Chinese
Chinese: buys directly from the Chinese mfg
us retail: surprised pikachu
CNBC should do a "How Target Failed In Canada" video.
Very simple! They put them too close to the border.
@@thedailylifeofjay3822 no, they were cheap looking stores they had bought from some Canadian discount stores. Walmart was already established in canada thus was making money. Target, however had empty aisles.
@@rudysalas9138 Dude I'm from Canada and my roommate worked there. They took over the Zellars locations. Here on the east coast they were fully stocked and was popular. What you said is factual but what killed them was not having the same deals canadians could cross the border for.
@@thedailylifeofjay3822 yes you are correct. They took over Zellars leases and they couldnt give better pricing than walmart. Target didnt control its logistics for merchandise like walmart does.
@@thedailylifeofjay3822 exactly, target Canada is expensive! If they are as cut throat as they are in the U.S.. It will likely give Wal-Mart run for the money and put Sears Canada out of business lot sooner!
lack of understanding cultures and customers shopping habits made many companies fail abroad. same thing with foreign companies coming to the U.S. lazy research before entry I guess.
projectmach McDonald’s kinda failed or didn’t get quite the success in China, KFC on the other hand is very successful, they were first in Chinese neighborhoods even narrow alleys before any other restaurant, they even adjusted their menu to the Chinese taste (not only fried chicken). McDonald’s kept westernized, many Chinese people didn’t even know how the drive-thru thing worked when McDonald’s got there.
There's a Baianju (B&Q) across the street from my apartment here in Beijing.
Empty every time I go in.
How did you get on CZcams?
@@shubhankarkale3980 VPN
That's how starbucks failed in Australia. By not understanding the culture.
ElementEvil it still hasn’t learned: now it just caters to Asian students and working holidays in CBD areas, where the formula doesn’t need to be any different from their home countries Starbucks
People DIY their home not because it's honorable, but because they can't afford contractors.
This
Seems like she doesn't know American culture that well, yet she's talking about how Americans don't understand Chinese culture
They probably could if they prioritized spending. Instead of a new car every 4 years spend some money on the house. Also labor is many times cheaper in China. Chinese workmanship on buildings is not as good as in the west either.
Wow! they did not open even one store. They just closed the once they bought slowly.
Hope you can explain why Lowe's failed to succeed in Mexico, and why they suddenly closed all their stores last April.
Love this type of videos!
"not understanding the culture"
same reason why Dunkin Donuts failed in India.
That applies to just about every company that tried to set up shop in a foreign country and failed.
retnavybrat yes.
and now Apple's turn experiencing it
Everyone in India was too poor to afford a 🍩
@@Miguel-ly4bm and yet Krispy Kreme is running here. Fool.
Atually, Home Depot may not be able to succeed in most of the Asian countries, because most of Asian people don't do large renovation work at home themselves, instead they would much prefer buying furniture or decorations to their houses. That's why Ikea can be successful in Asia, but not Home Depot.
They can if they focus their business model around contractors rather than individual customers. They do that in America, and only focus on DIY customers in times of recession.
@@LouisSubearth
You're talking about more like a B2B model in stead of B2C then. Personally, I still doubt if it will work or not in Asia, since Home Depot may lack much flexibility.
Totally off topic but I think the Professor’s accent sounds a mix of a southern US accent and the classic Chinese accent I’ve never heard it before and I love it 🥰
Was something I had really always been curious about, seriously.
IKEA DIY is elementary, the most difficult part is hauling the package into the trunk, into the elevator and into the home. Chinese consumers who are willing to do some manual work can handle on their own.
Home Depo DIY on the other hand is much more difficult, like knowledge of materials, garage to work in, pickup truck to haul the purchase, place to dump garbage, place to store the tools, and the most challenging of all, physical strengthen to handle power tools and mentality to embrace handiwork. So except for the knowledge part which they are mental ready and can try to learn on internet, the rest are impossible challenges to the Chinese consumers.
Wait, seriously ? You need power tools ? In my country ( part of Europe ) you would expect power tool usage ( not even always ) only from a high quality custom or small production furniture and even then 90% of the time you just need a power drill.
I would never expect a huge chain shop items that all most likely are mass produced to require power tools.
Like just recently we bought a local artisan tables for my grandparents and it was more easy then ikea furniture building.
Edit :
I think that in the past we needed more DIY, but nowadays everyone is moving closer to IKEA model, some companies even manufacture for ikea.
@@BlackPeagas Home depot doesn't sell furniture. They sell lumber, stone etc. , fixtures, and tools.
Do a story about why Target failed so spectacularly in Canada. It makes Home Depot look small.
I like to know. I shopped there every week for milk.
Buy some ppts from consulting company before market entry. That would help a lot.
Home depots net income was $11 billion last year, yet the stores are understaffed and employees are underpaid. SAD
Not in Canada
CEO and INVESTORS are the main employees...the rest just expandable labors!!
that's vulture capitalism for ya, make as much profit as possible.
if the salaries are low but you know people will work the jobs even if the salaries are 10-20% lower most companies will pay even less.
the right amount for them is just so much that the workers can survive.
The Daily Life Of Jay especially in Canada
But the employees are well-trained on how to evade helping customers.
How can a major corporation get it so wrong? The salaries for these pinheads is huge...and they flopped but still got to keep their income
Same reason Target failed in Canada. Culturally we are quite similar to the States, but they didn't do enough research into Canadian business practice and supply chain systems.
The city center living pattern is also similar to population layouts in France.
I always thought that Home Depot never really “got” the Chinese consumers nor their culture. DIY home projects are not their thing... at least to my understanding.
Yeah. DIY home projects is not a thing in Asia in general. You hire experts to do the work. Since you are no expert, you should not be messing with stuff you have no understanding off.
Pay an expert and save yourself endless hours messing with stuff and getting it wrong. You want to avoid having to pay an expert to do the job and even more to fix your mistakes.
Asian guys in my college don't know how to do handy man jobs either. Here in the U.S., father and son bonding thing is to build things together, but it's not Asian culture.
I am an Singaporean and most of he housing here are HDB flats which are quite smaller compared to homes in western countries. So we don't really learn much about handy man stuff since there is little need to spend so much time to learn those skills and decorate your home than just spending some money and hire someone who is more knowledgeable at this work. This might be the reason for many Asians that live closer in cities since flats requires less effort and time to manage.
@@sgcl10658 Asian culture and especially in china. They believe in optimizations through specializations. If you aren't an expert or working towards being one in something you hire one because they are multitudes more efficient than you.
Is Ikea really considered the same as a home depot? Ones a furniture store the other you build your furniture.
If American's single family house is build by reinforced concrete, I don't think DIY is an option to American people as well.
🤪Your comment is GENUINE GOLD I'm screen shooting it. 🤭 The only people in the USA who do not live in a home built on a foundation of concrete are addicted to drugs cracked out in a condemned falling apart abandoned house. It is pretty much ILLEGAL to not have REINFORCED CONCRETE under a building thats a house. It would have to be old and special to be without foundation.
@@jerrydurantiii3360 I didn't talk about foundation, I am talking about the structure and walls of the house. It is easy to DIY modify a drywall in US but almost impossible to do the same in China.
@@kenblock7350 it's not hard to work with concrete that's what conduit is for
Uhm, people in America DIY because contractors cost an arm and a leg and you are often at their mercy when it comes to actually completing the job on time
It's got not much to do with being "honourable"
Seems like she doesn't fully understand American culture herself, while talking about how Americans don't understand Chinese culture
She's not putting millions of dollars and opening a business in america.
So.....can you explain why a contractor tend to have such a ridiculous price but not China?
@@Vamusika It's still strange watching someone who has a romanticized vision of something talking about said thing as if she's an expert
It's kind of like how an American "expert" talk about say, how ninjas are all stealthy master assassins dressed in all black and armed with katanas and shurikens
@@izanaginomikotofase4thehed161 I do not understand your question or its implied meaning, if there is any
China has a higher standard of living....YOU hire people.....
Time is money. Chinese people don't have that much time to spend on DIY stuffs like the people in the West.
They are too busy making money.
same mentality in India as well
But no money
@@mtksbctk are you kidding?
Evoke Music india market is so small
I am wondering, how successful are the IKEA stores in India ?
I like how Sweden doesn't even break top 5 for IKEA lol
furniture from IKEA in china are mainly for rental property and room kids.
How did ( Home Way) do before HD??
They probably sold China made-good at China price.
I like how they use footage from 1990-2000 to depict china
(I don't know about the dates, but...) All that footage looks exactly like what I see here in Beijing everyday.
ebay, amazon failed in china. both were the same, clueless about china market and refuse to adopt the market culture there. in china, people don't like to buy houses, apartments that have been fixed. even for the second hand apartments or houses, they will rip old decorations off completely and start over based on their own ideas.
The clueless one is you. They failed because there is no rule of law in China. People and companies lie, cheat, and steal with impunity. They counterfeit brands, sell knock off products with defects. This is why Chinese companies can only succeed in China. They can't do business in the West because they will soon be sued out of business for breaking hundreds of laws. There is no company on the planet that can out compete Amazon when the rules are enforced the same on everyone. Alibaba's Jack Ma has now been outed as a communist party member. How do you think he got that success? Alibaba is a joke in the West. Everyone knows that NONE of their products using other people's IP has been legally licensed. THEY JUST STEAL IT. It's all counterfeit and most of it is garbage quality.
"Majority of Home Depot products were already made in China and available cheaper elsewhere" hahahahaha
Chinese think the same way as Indians about DIY.
Cheap labour is definitely one reason. After paying 425 dollar to clean my 2beds apartment here in the US, I decided to do the cleaning myself in future...
a month?
DESPAPITO xaa half day...
@@pengfeiwang0221 that is absurd..
@@pengfeiwang0221 better to do the cleaning yourself
Totally agree with bad service. In America, I never get help at these shops unless I hound an employee who are rarely around.
They should try Australia, the mentality is much more similar, people live in suburbs and like to DIY, it would definitely work. Bunnings is the only store to compete with.
you said the price is too high, but you didnt go into WHY HD's prices are higher than competitors. Do they import products? Are their floor plans less efficient and too big? Is the material quality high end and therefore has premium pricing? Surface level analysis.
doing manual labor is not thing thing you want to make customer do it , in southeastasia at least. i am from India , and all of the points mentioned are valid for India too.
Valid for all Asia. We don't think messing with power tools while building your bathroom by yourself as a fun game of adult LEGO. Most people want the bathroom built and built well. So would pay the cost for an expert to do the job.This is why Home Depot died.
pretty unreal they didn't do the research before opening stores.
“Do your homework”
- Every Asian Parent Ever
why there are no subtitles in this video???? i have homework and i cannot understand clearly 😡😡😡 please fix it😔😔😔
Everything is made in China, so why pay the price 2 times more for a name brand.
Actually people will pay a reasonably higher price for a better shopping experience... but they are selling the wrong product.
It's funny. Home Depot is such an American company.
it's weird that home depot would even consider opening shops in east asia at first place. people in most of east asian countries live in apartments built by concrete. how the hell could non-professionals do a half decent job in decorating concrete buildings' interior? it's not easy at all. not to mention there are liability issues when you fix a shared property by your own. even in the western countries, condo homeowners usually dont fix their own home by themselves.
Why can't they fix stuff themselves?
Also it easy to furnish a house.
@@projectnewwave6859 why do you want to do manual labor when you can hire somebody else?
That is becaome Home Depots in China is super-expensive. I went to the one in Shenzhen it had almost no service and prices were multiples of what I could get elsewhere.
What's home depot's brand appeal?
I mean many developing countries now have big box local stores similar to that seen in the west. So people can adapt to a no haggle environment.
I think its the culture that looks down upon DIY home projects that killed it in China.
No so much a look down, but more like, "I am not comfortable putting in a bathroom, or tilling a wall because I have no experience doing so. So I won't do it. I will pay an expert to do my bathroom." This DYI project is a very American thing to do.
Even in Malaysia IKEA does assembly for you (for a price). Home Pro also does installation and construction work.
Whenever CNBC asked “why this American company failed in India/China/Industrializing country”, they are always comments from people in that country explaining why they failed and always with the same answer: they were overpriced.
Keep this content up
1:34 To be fair, every other country that's not the USA works that way, not just China.
To be fair, Americans would rather own a house.
@@SpecOps140 Only when you have favorable land (resource) to population ratio. US is the only country I guess where it is favorable. Everywhere else, Japan, India, China, SE Asia, Europe etc there are more people. Australia and Russia/Canada have land but are mostly inhospitable with desert/tundra.
@@kopdinumb7255 I don't dispute that reasoning, I was just debating OP's comment. Also, China does indeed have the land and resources, just not the culture, mindset, and government housing (equivalent to US' HUD) program in place to move people out of cities into suburbs. To be fair, Americans take pride in owning land.
Its not about just the amount of land we have or the pride in owning one. A house is something you can actually sell unlike an apartment.
@@cs0345 I love your profile name
You guys need to understand that just because someone who was originally from China is not necessarily a China expert, especially if they have been away a few years. China is a fast changing place, in terms of mentality, thanks to the internet. Whereas 20 years ago the term DIY may have been foreign today it is trendy amongst the younger generation. That is not to say a complete replica of a US-styled Home Depot would work, but with modifications and localization it should have a fighting chance due to its purchasing power that could drive down the prices to beat a local mom and pop shop.
They failed because they focused on retail consumers instead of on contractors.
Do It For Me is generally my preferred lifestyle. XD
hahaha 10/10 comment
I don’t know why business don’t research the foreign market they’re going into that’s the number reason why they fail learning about other cultures you’re gonna do business thing is something I learned in my community college communications class so I don’t know how these people from top colleges working in business don’t know how to succeed in foreign affairs and changing times
The US could care less those CEO's of corporations are all about the money. Make their money in one pool and pack up and leave and go to the next
At least they care a little.
Maybe inn the future they'll learn and care a little more
I am a real estate investor in China and US. Totally understand the difference in mentality. In US, I often fix and touch up my properties myself. If the project is big, I hire some Latino to work alongside me. In China, labor and materials are so cheap that you hired a company to handle everything from design to labor, not to mention the corrupt local officials that disapprove anyone doing renovation unless it is contractors within their connection who will give them a cut.
So in China, people won't be driving a long distance to home depot, paying double price, lose face doing hard labor, and get potentially harassed by government officials for bribes.
That's for the insight, that really completes the picture.
No one remember to employed a Chinese trained social science graduate.
Home depot also failed in Chile, years ago...
You guy's should do a video about why Daewoo failed in the US.
Sounds a lot like Walmart’s international business model 🤦♂️
*Even Amazon struggled in Europe because they didn’t understand the culture.*
And still does, tbh. Americans seem to have big troubles understanding that they're just a people and not the absolute definition of mankind...
@@stefanbraem So mexicans seem to have the same troubles too? Damn watch your words about us, I think you're saying all of the americas are not the absolute definition of mankind. :[
We have had problems with HD as to stocking all the items we need for jobs around the house. They stock TV antennas, but not signal amplifiers. The equipment the have is very cheaply made, and will not hold up to extended use. We purchased treated lumber twenty years ago, which was supposed to last thirty years. It has rotted and been hauled off to the dump. The other big box stores are not any better. They seem to think we want to order via the net, NOT!!! Like most U.S. citizens, I want it and I want it now. End rant.
@5:28 especially in east west distance.
Price negotiation in the US is done only for high price items, as for example, a car or a house, but not something that costs $10 or even $100. Haggling for nickels and dimes is only done on used products in the US.
How have IKEA and B&Q done in China?
It seems with the way other local more successful businesses work HD should've changed to a HUGE WAREHOUSE FOR CONTRACTORS with low overhead and large inventory. Simple. Business. 101.
Yeah pretty much all building material, large tools are useless in Chinese apartment. If HomeDepot focused on selling small tools, screwdrivers, plants and small furniture it might still live.
This is why when u buy home from flippers in Canada it has low workmanship. They are newbies
Yeah. People who are not professionals.
Home Depot: we can match my price guaranteed
Chinese competitors: hold my rice cake
Living in apartments, Chinese homeowners aren't even allowed to drill or saw or make any renovation related noise on weekends or after work even if they wanted to DIY. Hired help comes in on weekdays when most residents are at work to make the noise tolerable.
0:35 shandong isn't a city. It's a province
2:57 I don’t know how I feel about this statement, because I see financial successes in manual labor as well. Building $5-10M apartment buildings or something? Can someone elaborate what this statement is saying?
Instrumental near the end go hard hard
It's a no brainer. When labor is so cheap, how many people would favour DIY over lying in couch?
The normal Chinese customer can't afford the kinds of things in US Home Depot. So you're tapping a small cash reserve. They also typically have a single local store that sells everything, like our Department stores with 4 or 5 floors already, that is conveniently located. Just my experience working in the "countryside" (small rural cities) in 2004-2005 Shangdong province
"NO Negotiation" the woman cracks up!
even if you hire help, those contractors go to homedepot. every homedepot store has a garage for contractors to pick up items in bulk. so it's not about diy or difm. it's all about the price.
It's not only about culture but rather the service price difference in a developing country and a developed country. It's just because the labour is still way cheaper than US. For a plumber to come to your house in the US, it's probably going to cost you around $100/ Hour, in China , they will fix it for you for $20. Why the hell you need to buy the expensive tools and do it yourself when it's affordable?
Dear CNBC team
Your stories are great but please make sure you people use the right maps.
Your team has mentioned POK as part of Pakistan which is actually part of India.
I think the only other place that Home Depot or Lowe’s would be really good at would be Europe. Mainly due to the fact that these American style home centers are much more easier to comport to countries where they have a good mixture of large suburban and urban populations. It was not something that could’ve been imported over to China for various number of reasons, mainly that there isn’t a good mixture of population between suburban and urban areas. And that Home Depot and Lowe’s do not know that they needed to focus some of their businesses in the inner cities. Also, another major problem for most of these supercenter style stores from the US that makes it hard for them to comport to other countries is how large they are, this is another problem for some people in other countries. The reason why I say this is because most stores in other countries, do not have large parking lots that people have to crossover, and if they do it’s usually on the second or third floor of the building. This means that the building can be easily accessed from the street without having to cross a large parking lot. This is also not to mention many stores in Europe and other countries very small.
3:12 - Yea, It's not a good idea to use stock footage to describe China when it's actually filmed in Hong Kong.
and Japan for ikea (price in ¥)
Patrick G. Pots no, that’s indeed China. Look at the labels, Chinese not Japanese. Also their currency signs are similar. ¥ is rmb, ¥ is also yen. Just like American dollar and Canadian dollar and Singaporean and Australian so on, all use $.
@@TheMrzhangjason Thanks man,learned something new ! I stand corrected
As a Chinese, I have never heard of the home depot brand.