Home Depot closes stores in China and completely withdraws from China

Recently, a piece of news spread on the Internet: "Home Depot will completely withdraw from the Chinese market after factory inspection." At the same time, according to people familiar with the matter, Home Depot China has received a notice from its headquarters: "Close stores in China and completely withdraw from China."

It is understood that many Home Depot employees suddenly received a temporary notice of store closures, while Home Depot China's senior management may have already known about the headquarters' decision to withdraw from the Chinese market and began to prepare for the aftermath.

It is reported that after closing all its stores in China, Home Depot China will retain a part of its staff for a period of three months to handle the aftermath, including employee termination compensation, inventory handling, account clearing, and settlement with suppliers.

As the second largest retail giant in the United States and the largest home improvement supermarket in the world, Home Depot acquired Tianjin Home World for more than 100 million US dollars in 2006, thus gaining a roundabout way into the Chinese market. In August 2007, Home Depot opened stores in Beijing, Tianjin, Xi'an, Zhengzhou, Shenyang, Qingdao and other cities.

However, Home Depot, which had high hopes for the Chinese market, has been experiencing a "regressive" development trend in the Chinese market due to its inability to adapt to the local environment by copying the American supermarket model. In the past five years, Home Depot has not opened a new store in the Chinese market, but has been shrinking and closing stores.

Compared with the collapse of Home Depot China, Chinese local companies such as Red Star Macalline and Easyhome, which adopted the store model, entered a golden period of rapid development during this period. Foreign supermarkets and local stores showed completely different development trends.

It is understood that Home Depot's withdrawal from the Chinese market was mainly due to years of losses and the failure to find a reasonable profit model. In the view of Zhang Zhiliang, vice president of Huanailijia, the development of the "supermarket model" in China has not been good, and it is only a matter of time for Home Depot to withdraw from China. In addition, Home Depot's withdrawal from the Chinese market is also related to the current poor environment of the home furnishing market.

It was a mistake for Home Depot to sell furniture and building materials in the form of a supermarket in China. Coupled with the poor overall environment in China, it eventually led to Home Depot's complete withdrawal.