Wednesday, August 25, 2010
Foxconn and Retail
Foxconn's public announcement that it will venture into retail has the potential of being a real game changer (link here and here). With GOME on the ropes due to the arrest of its founder and ensuing succession battle, Foxconn's strategy of building up a rural network based upon setting up its own employees in business has the potential to rival Lenovo's rural distribution arm. It will be interesting to see if the Chinese state tolerates this gambit. As much as Taiwanese are considered compatriots when the issue of Taiwan's political status comes up, the Chinese state more often than not treats Taiwanese firms as foreign ones. This can be good (lower corporate taxes) but also bad (many non-tariff barriers to the "strategic" parts of the domestic market blocking Taiwanese firms).