The Reasons Behind Home Depot’s Multimillion-Dollar Loss in Asia
Home Depot is a staple and necessity here in America; if something is broken or needs remodeling, this is the store to go to for both supplies and some friendly help. However, in Asia, Home Depot stores did not have similar success and were forced to close down because market strategists failed to take into consideration the different cultural wants and economic standpoints across borders. The obvious reasoning for this loss of appeal is that the bold orange look and homey interior did not replicate the more chic, and sophisticated style wanted by Asian countries, especially China, and, as a result, the mere image and stylistic choices of Home Depot turned away many potential consumers. This explains why other home recreation stores such as IKEA were a huge hit because they embodied what these people wanted: modern and upscale furniture with European sleek designs.
However, while this was the main reason for Home Depot’s failure, there were many other cultural issues that Home Depot failed to address. While in America it might be more cost-effective to perform at-home repairs with your own supplies, in Asia, this type of labor is very affordable. It would be both cheaper and easier to hire someone to fix a problem rather than go out of your way to try to gather supplies and figure out how to do it yourself. Not only that but, in a social stance, there is a very clear divide between the blue-collar laborers from the white-collar higher class workers. It would be considered shameful and degradation to get one’s hands dirty doing work that was meant for someone of a lower class.
Additionally, Home Depot failed to take into account the housing market of that time paired with who they should appeal to. In China, because of the one-child policy, wives can be hard to find, so, in couples, husbands tend to give the final judgment to their wives to appease them. However, Home Depot’s rustic style appealed more to men than women, which turned away much of the female population. On top of that, currently in China, homeownership is rapidly increasing; thus, many new, excited homeowners are looking for ways to revamp and furnish their homes. Home Depot failed to realize this new housing market and because their focus is more on repair, people did not have a need for their services; while, on the other hand, furniture stores were centered for success and prospered because of this housing boom.
In conclusion, Home Depot’s failure reflects the importance of catering and understanding cultural wants and economic needs, especially in the marketing industry. This reflects that not all things are universally similar or successful and these cultural distinctions are what encourage constant analysis and adjustments.
