University Study Concludes Why Home Depot Failed In China: It Ignored Women

A failed Home Depot (NYSE:HD) effort to become a major retail presence in China was probably because the chain did not focus its efforts on women, according to a new study from Kennesaw State University. Home Depot's China efforts started when the chain purchased 12 stores from a Chinese retailer called Home Way in 2006 and ended—rather violently, complete with employees literally taking executives hostage—in September (2012) when all of those stores were closed.

The problem, according to the university study, involved both women's current role in China and how Chinese shoppers in general view do-it-yourself (they don't like it). "Especially in China, women make the final decision in buying home decor products," said May Hongmei Gao, associate professor of communication at Kennesaw State University. "After the one-child policy in China, women became so scarce that brides were given full control of how they wanted their house to look after marriage."

The report detailed how Home Depot's China plan fell apart, according to The Atlanta Business-Chronicle. "Home Depot's 'DIY' concept also would not work in China for two reasons, the study found. The first is because, culturally, manual labor is considered to be for lower-class citizens. Instead, a 'do it for me' model would have thrived in China, where Home Depot could provide a 'design and build service' package for customers. Second, the DIY concept could not be geared towards women at all, Gao said. In short, Chinese customers would not want to see the paint or light bulbs, but rather a fully-designed finished product."

Home Depot CFO Carol Tomé, who was directly involved in the chain's China strategy, has made comments that are similar to some of the conclusions in the university report. Tomé, for example, has spoken of the need that their efforts in China couldn't be the DIY U.S. model. "The middle class is growing in the market, but it's not a 'do it yourself' market," Tomé said. "They don't live in houses with garages for tools. They wanted to hire someone to do it for them."

She also agreed that smaller shops in malls was a much more China-friendly approach than HD's typical warehouse approach.

For more:

- See Atlanta Business Chronicle's university study story
- See Atlanta Business Chronicle's China Home Depot violence story

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