Best Friend Music
How an innovative retailer is expanding the universe
of music makers in Shanghai
China’s fast-growing economy and its burgeoning middle class have fueled rapid growth at Best Friend Music, one of the country’s top retailers. Since its founding in Shanghai in 1997, the full-line operation has enjoyed consistent growth and currently operates 20 locations in the greater Shanghai area, with plans to add two more in the next year.
Best Friend Music boasts tastefully designed and well-merchandised showrooms, stocked with top product lines including Steinway, Yamaha, and Pearl River pianos, Casio and Roland electronic products, and Fender guitars. Founder and CEO Mrs. Zhu Wen Yu has also placed an emphasis on developing a well-trained sales staff. “Our success depends on honesty, professionalism, and teamwork,” she says. However, perhaps the single most important factor in Best Friend’s success has been an extraordinary educational operation that serves 60,000 students.
Over the past three decades, China’s economic growth has outpaced the development of its cultural evolution, including the development of music schools, the training of independent music teachers, and the concept of amateur music making. Best Friend Music has filled the void, addressing all three issues with high-quality music instruction and an ambitious marketing campaign promoting the benefits of making music.
In the Chinese market, according to Mrs. Zhu, offering a good product at a competitive price isn’t enough to build a successful retail operation. If you want to sell someone a piano, you also have to teach them how to play, she says. That’s where Best Friend’s teaching operation comes in. It’s a draw for students, and it gives the store credibility as the place to go for all musical needs.
While Best Friend Music’s teaching program provides a steady source of sales prospects, it’s also a profitable operation in its own right. Teachers work with salespeople to help customers select the right product, but their first priority is to provide a solid educational experience. Mrs. Zhu says that a good experience in the teaching studio generates the word of mouth that attracts new students.
Best Friend Music posted increased sales at each of its locations last year, but the Chinese market is changing. In acoustic pianos, which generate well over half the company’s revenues, unit sales have declined, but dollar volume has increased as buyers have opted for more expensive instruments. Mrs. Zhu says that pianos now have to compete with a broader array of consumer goods, ranging from cars and consumer electronics to home furnishings, and this has impacted the sales of lower priced instruments. But those who are committed to buying a piano are opting for higher-quality and higher-priced instruments.
Widely publicized crackdowns on graft and corruption by the Chinese government have adversely affected the sale of certain luxury goods, including Rolex watches and BMWs. Mrs. Wu thinks it may have slowed walk-in traffic at the stores somewhat, but she is unconcerned. With parents still clamoring to sign their children up for lessons, she sees continued strong demand.
Although China is still described as an “emerging market,” Best Friend Music has adopted all of the modern retailing techniques. A website enables consumers to shop inventory and sign up for lessons. The store actively uses social media to promote events and keep in touch with prospects. And a newly installed ERP (enterprise resource program) provides a powerful management tool. Mrs. Zhu says, “These are the steps you have to take today to remain competitive. The customer demands it.”
Using internal profits, Best Friend Music plans to open between two and three additional stores a year going forward. All the stores are slated for the Yangtze River Delta, which surrounds Shanghai. Mrs. Zhu has dismissed the idea of venturing farther afield because she notes that each region in China has a distinctive culture that presents a barrier to outsiders. “We understand the Shanghai market,” she says. It’s also worth noting that the Yangtze River Delta is home to 110 million residents, many of whom are potential piano buyers.
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