JULY 27, 2010 • According to the Xinhua news service, Guangdong-based Foxconn Technology Group is negotiating with the government of Henan province in central China to open more than 2,000 chain stores. The technology manufacturer that produces everything from iPhones to Xbox 360s, is attempting to diversify its business model by selling IT products and home appliances in growing consumer market of inland China.
Impact: As is often the case in China, more is going on than what is seen on the surface. China’s population has been heavily concentrated along the coast and the major cities. The next area of growth is reaching the consumers deep inside the country who are now getting their share of the economic expansion. Foxconn will have a major leg up over regular retail competition. The company is already bringing new factory jobs to Henan province, and it is expected Foxconn will be receiving “concessions” from the provincial government in return. It’s a business model that would encourage anti-trust scrutiny in the West, yet in China, might thrust Foxconn into one of the country’s primary retailers in short order.
