A new format for the Chinese market

Orgill, an American hardware distributor, is going into retailing in China under a joint venture arrangement. Together with three of the self-proclaimed biggest members of the Chinese building materials association, the company now has a store of around 600 m² in operation in Tianjin under the Home-Basix banner. For more than two years Orgill has been working with the three Chinese partners on developing a retail solution for Chinese entrepreneurs looking to venture into the hardware and home improvement industry. The programme, which was officially launched in April with the first retail store, represents a long road of collaboration, planning and implementation from all involved. “While we actually opened the Tianjin store in April, the process of developing and refining the concept began several years ago,” says Ron Beal, Orgill’s president and CEO. “So far, we have been very pleased with the results.” The store, tailored for an urban setting, is designed like a modern, convenience-oriented hardware outlet. It carries products from all the major hardware categories under one roof. Prior to the opening of the Home-Basix store, the Chinese home improvement retailing industry mainly consisted of a handful of big-box retailers such as Home Depot and B&Q, building materials malls where individual vendors offer specialized assortments in various product categories, and more rudimentary street shops that carry a smattering of different products. “This store is truly different from anything else in China,” says Beal. “It is our goal, together with our local partners, to bring modern, convenience-oriented hardware stores to China and to develop a distribution and retail services system to support these stores.” Orgill has also established a separate, wholly-owned subsidiary in Shanghai to help the development of the project and to assist American manufacturers who want to export and market products throughout China. “One of the things we have found is that American products sell well here,” says Beal. “Our product mix consists of a good range of domestic Chinese products, as well as a meaningful representation of American products and brands, which have been very well received.” According to Beal, Orgill plans to open two additional laboratory stores later this year in different settings. “The Tianjin store is in an urban area. We would like to open stores in suburban and rural locations as well, to help us perfect both concept and product mix,” Beal says…