Best Buy Co. agreed to purchase a majority stake in China’s fourth-biggest appliance and electronics retailer, Jiangsu Five Star Appliance Co., for $180 million, securing a foothold in China’s booming consumer-goods landscape.
Best Buy, the largest consumer-electronics retailer by revenue in North America, will use Five Star as part of a broader expansion into China. The Richfield, Minn., company expects consumer-electronics sales in China to reach nearly $100 billion in 2010. In April Best Buy announced a plan to build a store in Shanghai, to open next year, that, at 86,000 square feet, will be about twice the size of its U.S. stores.
Best Buy is hoping that teaming up with Five Star will help it to compete against the country’s dominant electronics retailers, such as GOME Electrical Appliances Holding Ltd. and China Paradise Electronics Retail Ltd.