Rapidly expanding electronics retailer Best Denki makes inroads in Kuwait

Kyodo

Consumer electronics chain Best Denki Co. is steadily expanding business in Kuwait since its debut there three years ago and plans to open its fifth store in the oil-rich country by the end of this year.

Its strategy is to provide Kuwait’s affluent clientele with the meticulous customer service Japan is known for while also making use of the local custom of “diwaniya,” or social gatherings, for word-of-mouth marketing.

The retailer, based in the city of Fukuoka, has about 30 years of experience in Asia outside Japan, namely Singapore, Malaysia, Indonesia and Taiwan. Kuwait was its first venture into the Middle East.

In all, Best Denki, listed on the Tokyo Stock Exchange’s first section, has 57 outlets outside Japan either through equity ownership or franchise arrangements.

In Kuwait, through a franchise agreement with Easa Husain Al-Yousfi & Sons Co., a Kuwaiti consumer electronics wholesaler, Best Denki opened its first store in the suburbs of Kuwait City in September 2009, targeting the wealthy class that makes up about 30 percent of Kuwait’s population.

To differentiate itself from its competitors, Best Denki outlets in Kuwait offer the same services provided in Japan. For example, whereas in Kuwait, customers are typically given the phone number of a manufacturer when they want to have a product repaired, Best Denki makes such arrangements on their behalf, saving them the hassle.

The Japanese retailer also ensures that storefront displays are more customer-friendly, such as by providing recommendations for TVs based on room sizes, just as they do in Japan.

At the same time, Best Denki also places emphasis on the traditional diwaniya gatherings, a kind of town meeting held over Arabian coffee at private homes. Officials of its Kuwaiti subsidiary frequently attend such sessions to distribute promotional flyers and spread the word.

“When I go shopping I will compare (the prices with rival stores),” said a 65-year-old former policeman who was selecting a computer at a Best Denki in the city. “Information-gathering at the diwaniya is a must.”

Best Denki is set to open its fifth store in downtown Kuwait City at the end of this year and plans to open another in the near future, which will then enable it to cover almost all trading zones in the country.

The firm forecasts about ¥4 billion ($50 million) in sales for fiscal 2012 in Kuwait, about triple what it did when it first opened there.

Koji Idera, a senior managing director of Best Denki’s local subsidiary, acknowledged it took a lot of hard work and patience to train its staff due to various differences in business cultures.