Commentary: Botching Retail in China

By January 23, 2008 No Comments

The author of Doing Business in China For Dummies shares his unhappy experience buying a toilet in a Shanghai store.

I was recently surprised to learn through a bad experience that major foreign retailers operating in China outsource portions of their sales force. Several weeks ago, I paid my first visit to a Shanghai B&Q store in order to buy a toilet for our new office. B&Q is a large U.K.-based home improvement retailer.

Since 1999, B&Q has been aggressively building a presence in China. B&Q is so entrenched in China that when Home Depot entered the Chinese market by acquiring The Home Way, a Chinese home improvement retailer, there was a good deal of skepticism as to whether Home Depot could compete with B&Q. Given that B&Q has been operating so long in China, I am surprised it risks its brand equity by using a retail model I consider to be deceptive and anti-customer, the crux of which is that the store does not always employ its own salespeople.

Instead, B&Q uses manufacturer representatives to sell certain products in the store. However, the manufacturer representatives, however, are dressed in store uniforms, creating the illusion they are salespeople who actually work for B&Q.

The saleswoman with whom I spoke was dressed in an orange-and-white B&Q apron. After listening to my requirements, she directed me to a toilet brand from Australia with which I was not familiar. When I asked whether they (in my mind, B&Q) could deliver and install, she replied, “Yes, of course. There will be an extra charge, though.” Fine. I told her they would have to first uninstall the existing toilet. “No problem.” Then, I told her the existing toilet is a squat-style toilet, which is when she began to look concerned. I also told her it was an elevated-squat-style toilet when she asked whether it was an elevated- or indented-squat-style toilet.

“You will have to get somebody else to do the installation.” What? Why? “Because it is too much work for us to do.” What if I pay an extra fee? “No, I’m sorry. We cannot do it.” I then asked for her to call her manager over. She replied that her manager does not work for, nor at, B&Q. Huh? Rather, her manager works for the particular Australian toilet producer in question. Ah-ha! I asked whether it would be that producer that would deliver and install the toilet. “Yes,” she confirmed.

I informed her I would like to buy a brand whose employees did not mind a little hard work. Disingenuously, she blurted out, “None of the other brands will install it either. They all work this way.” I did not believe her, but what was I to do? Nothing for the moment. I walked away to another part of the store.

When I returned to the land of toilets 15 minutes later, the first saleswoman was gone. Another one stood in her place. I felt out the new one, and it seemed that she worked for a different brand. I was hopeful that I would get somewhere. Just when she agreed it would not be a problem for some brands (hopefully including the one she represented) to uninstall the squatter, the other saleswoman appeared. When the more helpful woman realized that I had been speaking with the Australian brand representative earlier, her tune changed entirely. “No, I do not think that any toilet company will uninstall an elevated squatter.” She did not want to embarrass her quasi-colleague. %#@&!!!

I ultimately bought the Australian toilet and found a third party who would take out the unwanted squatter. However, the B&Q experience still upsets me. It recalls the time a raving, old woman chased me down the aisle of a Shanghai Carrefour store insisting I buy a seven-yuan mop instead of the three-yuan model in my cart. Carrefour is a massive French retailer whose stores are similar to those of Wal-Mart. (That incident was the impetus for my discovery that Carrefour also uses manufacturer representatives in certain situations.)

Trust is not abundant in China. There are good reasons for this. Yet, I would have expected foreign retailers to attempt to offer a model in which the agendas are much more transparent. (Best Buy is an example of a Western retailer doing things right by exclusively using its own salespeople, and by not paying them commissions.) Chinese consumers walking into home-improvement stores generally know far less about home repair than their U.S. counterparts do. By not offering unvarnished advice, B&Q is missing an enormous opportunity to generate goodwill toward its brand. Instead, it is doing the opposite – at least among consumers, including myself, who expect more.

Carson Block is a USC graduate (B.S. Business Administration, 1998) and is now a Shanghai-based author and consultant. He is co-author of Doing Business in China for Dummies (Wiley, 2007) and the founder of ChinaPrimer.com.

The views expressed in this commentary are those of the author and are not necessarily shared by US-China Today or the USC U.S.-China Institute.