Japan's leading appliance retailer gets knocked out of China

Yamada Denki is set to pack up after facing "obstructive behavior" from local firms, and boycotts from anti-Japanese sentiments due to recently escalated territorial disputes.

The entrance of Yamada Denki's outlet in Nanjing, China (Source: Asahi Shimbun)

Japan's leading electronics appliance store Yamada Denki has left Nanjing after opening its store for a year, due to tensions over the disputed Senkaku or Diaoyu Islands, and "obstructive behavior" from rival companies and price wars.

The Asahi Shimbun reported Yamada Denki had planned to shutter the 20,000 square-meter electric appliance shop in Nanjing at the end of May, later postponing the closure by two weeks to offer after-sale services. It had initially planned to use its store as a springboard into nearby Shanghai.

According to the article, a series of miscalculations had undermined Yamada Denki's strategy.

The company reportedly also had difficulty stocking products made by Chinese manufacturer. According to Jun Okatomo, vice president of the company, there were "obstructive behavior" by companies with large volumes of sales in local areas which showed Chinese retailers have prevented Yamada Denki form purchasing Chinese makers' products.

The choice of location also worked against it being located in the city where the 1937 Nanking Massacre took place, hence more prone to anti-Japanese sentiments than other parts of China.

"I have not felt like shopping here since September last year [when the Japanese government officially acquired the Senkaku/Diaoyu Island deed titles from private ownership]," a 45-year-old Chinese man, who visited the shop in early May for a close-out sale, told the Japanese publication.

China's five major retailers, including the nation's top two companies, had stores within a few dozen meters of the Yamda Denki shop. When the Japanese store offered a "price matching" service there as it does in Japan, it found itself involved in a fierce price-cutting war.

Industry watchers previously told ZDNet Asia companies caught up in politically-charged incidents leading to product boycotts should stay out of it , but grassroots engagement and swift action will also help in crisis management.