Argos, the British retailer known for its mammoth-sized product catalogue, has launched a new e-commerce site in China. It follows a joint venture between Argos’ parent company, Home Retail Group, and Chinese manufacturing giant Haier setup in 2011.
The website has been a long time coming, and echoes the Western version in its appearance. It stocks a seemingly infinite number of goods, including electronics, makeup, toys and furniture, mimicking the ‘anything and everything’ model pioneered by Amazon.
As Tech In Asia reports though, Argos is entering China long after a number of well established rivals, such as Dangdang, 360Buy, Suning, Gome and Tmall, the latter of which raked in more than $150 billion in revenue last year alongside its sister site Taobao.
While Argos is a household brand in the UK, it holds little impact in other regions at the moment, which makes us wonder how they’ll be able to attract customers already satisfied with rival services.
However, Argos should have the experience and infrastructure to avoid any of the problems associated with new or growing startups. The website has been built to replace Haier’s existing e-commerce store, called Gooday.cn – which now redirects customers to Argos’ new offering.
The joint venture established in 2011 means that Haier owns 51 percent of the new e-commerce site, with Argos holding on to the remaining 49 percent. At the time, the deal was signed following a near-total collapse in Argos’ profits in the UK. Its first half operating margin had sunk to 0.2 percent, resulting in a 94 percent fall in operating profits. Last year, the company failed to make much headway either.
China appeared to be the answer. The giant laminated catalogue long associated with its UK business would be scrapped in favour of an almost total online offering. Haier’s existing network of small electrical stores, thought to be around 6,000 in total, would be used as a pick-up point for online orders, keeping property costs to a minimum.
That hasn’t lasted though. Tech In Asia says that Argos opened three physical stores in China focused on the Shanghai region, mimicking the look and feel of its UK stores. “That means the stores are mainly filled with catalogs on desks, where buyers peruse the items to be fetched from the warehouse,” the website reports.
So for now, it doesn’t look like Argos is altering its business strategy. While its three stores in China are insignificant compares to the 700 plus found in the UK, its inability to lose the catalog suggests that it still as a long way to go before it can compete with the likes of Amazon.
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