IT doesn't matter if a cat is black or white, so long as it catches mice, former Chinese leader Deng Xiaoping once famously remarked.

In today's bustling market economy, introduced by Deng more than two decades ago, Chinese consumers might modernize that philosophy to observe that it doesn't matter which store you shop in as long as it offers a low price and good service.

But in the world's most populous consumer market, the world's biggest electrical appliances retailer just couldn't catch mice. United States-based Best Buy said last month that it's closing all nine of its stores in China. It plans to reopen two stores later.

The company said that it is closing them to optimize "its operations at its (two) Best Buy-branded stores in China," and re-focus on local chain Five Star it acquired several years ago.

Analysts said the shops closed because they couldn't offer competitive prices when saddled with high operating costs, and local customers are too obsessed with low prices to care about service.

Some customers see the problem in more black-and-white terms. Best Buy, they complain, offered neither low prices nor good service.

A Norwegian living in Shanghai was furious after going through an unhappy after-sales experience with Best Buy.

He said he bought an iPod from the shop two years ago and it malfunctioned after he used it only for a week. He said he was told by Apple to get a replacement at Best Buy, but the store turned him down.

"I didn't mind paying an additional two or three hundred yuan to extend an after-sale guarantee," he said. "But they don't keep their promises. I vowed never to buy anything more from Best Buy."

Days numbered

Best Buy's days were probably numbered when it first opened its Asia-Pacific headquarters in Shanghai in 2005. In the four years that followed, Best Buy gradually bought out Five Star Appliance, a Nanjing-based electrical appliance retailer that was China's fifth-largest, for US$390 million.

But Five Star, which continued to operate under that name, expanded its outlets too slowly compared with its competitors. In the past five years, Five Star outlets grew to 160 from about 140 while Suning Appliance Co, one of the largest retailers in China, boosted its store number from 350 to 1,300 stores, and GOME Appliance Holdings more than doubled its outlets to 1,400.

"Five Star could have done better without Best Buy," said an industry official, who declined to be identified. "First, it takes much longer for a foreign company to get approval to open new stores in China. Second, before the takeover, Five Star focused on development in inland and smaller cities, a strategy at odds with Best Buy's target of higher-end customers."

The first Best Buy outlet was opened in Shanghai's Xujiahui shopping district in late 2006. The company waited 22 months before opening a second outlet in the city.

In 2010, two shops were opened in Suzhou and Hangzhou, which are relatively close to Shanghai, only to be closed this year along with six outlets in Shanghai and one in Beijing.

Best Buy said it will continue to operate the Five Star chain in China, with plans to open up to 50 new Five Star stores in the next 12 months.

"We hope our investment will be more rewarding," said David Sisson, country manager of Best Buy China. "We are only changing the way we invest, not retreating from China."

For Best Buy, the closure plan might have been in the works for some time. In its fiscal report for the year ended February 28, 2010, the company said it planned to close "unprofitable stores" in China. In that year, it reported sales in China rose 7.3 percent to US$1.68 billion. That compared with a 10.4 percent rise in global sales to US$50 billion.