The encyclopedia · Sales & Retail · Strategic decision · 2006–2012
Home Depot shut all its big-box stores in China — DIY met a 'do-it-for-me' culture
Home Depot bought into China in 2006 and opened big DIY stores. Chinese shoppers preferred to hire someone to do it for them; by 2012 every big box was closed.
The Home Depot · 2012-09
What happened
In December 2006, The Home Depot, the giant American home-improvement retailer, entered China by acquiring a local chain, The Home Way, giving it a dozen stores in six cities. Its whole identity was built on do-it-yourself: vast warehouse stores where homeowners bought lumber, fixtures and tools and did the work themselves. Home Depot assumed China's booming housing market would create millions of eager DIY customers.
It misread the culture. In China, home renovation was typically something you hired other people to do — a 'do-it-for-me' market, not a do-it-yourself one. Labor was relatively inexpensive, and Chinese consumers preferred to see a finished result, like a renovated room, rather than buy the raw materials and build it themselves. As a Home Depot spokeswoman later conceded, 'the market trend says this is more of a do-it-for-me culture.' The big-box DIY format simply didn't fit.
The stores struggled. Home Depot closed its last Beijing store in 2011, and in September 2012 it announced it was shutting all of its big-box stores in China, keeping only a couple of small specialty outlets. The company admitted it had misread the country's appetite for DIY. Rather than a clean exit, it took a 'wait-and-see' posture, reluctant to leave entirely because re-entering later would be costly — a quiet, expensive retreat from a market it had entered with such confidence.
Why it happened
- Home Depot exported a do-it-yourself format into a market that was fundamentally 'do-it-for-me,' where hiring renovation labor was the norm.
- It assumed a booming housing market automatically meant demand for DIY retailing, without validating the underlying consumer behavior.
- Chinese shoppers wanted finished results, not aisles of lumber and fixtures to assemble themselves.
- The big-box warehouse model, so successful in North America, had no real advantage in a market structured around hired labor and different shopping habits.
The lesson
Your business model is a cultural assumption made physical. 'Do it yourself' only works where people want to do it themselves. Before exporting, check the behavior it depends on exists there.
Aftermath
Home Depot's China retreat is taught alongside Walmart in Germany and Starbucks in Australia as a case study in how a dominant home-market model can fail to travel when it rests on cultural assumptions that don't hold abroad. The company kept a small specialty presence and watched the market from the sidelines. The lesson is a sharp one for international expansion: the thing you're really selling — here, the idea that customers will do the work themselves — may be the one thing the new market doesn't want to buy.
Sources
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