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RadioShack in joint venture to open stores in China

RadioShack is forming a joint venture with a Chinese company to open consumer electronics stores in China, Taiwan, Hong Kong and Macau.

According to an SEC filing, the Fort Worth-based retailer will invest $2.94 million and own 49 percent of the venture, with Cybermart owning 51 percent. Cybermart is a wholly-owned subsidiary of SMS Marketing Service.

RadioShack said it will enter into a licensing agreement giving the venture the exclusive right to use the RadioShack brand. The first store is set to open in Shanghai in July.

The move continues a push into Asia for RadioShack. In March, RadioShack announced a deal with a Malaysian company to open at least 1,000 stores in 10 southeast Asian countries including Malaysia, Indonesia, Thailand and Vietnam. That company, Berjaya Retail Berhad, is controlled by Vincent Tan, one of Malaysia's richest men. 

-- Steve Kaskovich





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It is becoming even more common for such companies to expand into the Asian continent, which benefits their stores elsewhere with cheaper production and increases their market potential by reaching out to new markets. Asians are the champions of electronics and most electronics companies in the world manufacture their components there due to cheaper labour. Huge money is flowing into the Asian economy from the US and Europe and this way, companies can be more competitive in their respective markets and also while selling online. In fact, many companies can better manage their supply chain by joining other companies in this continent, making use of their resources rather than having to start from scratch.

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