Home Depot entered China with 12 stores. Six years later, it closed them all.

In December 2006, Home Depot entered China by acquiring The Home Way, a Chinese home improvement chain with 12 stores in six cities. The acquisition was the company's first major push into Asia, and it looked like a logical expansion: China's booming construction market should have created huge demand for home improvement products.

But Home Depot brought its American DIY (do-it-yourself) model to a market that was fundamentally DIFM (do-it-for-me). Chinese consumers did not buy lumber, piping, and light bulbs to renovate their homes themselves. They hired contractors who handled everything, or they bought finished homes that were already renovated. The concept of spending a weekend installing shelves or painting a room was foreign to most urban Chinese consumers.

By April 2011, Home Depot had closed its last Beijing store. In September 2012, the company announced the closure of all seven remaining big-box stores in China. A company spokeswoman conceded: 'The market trend says this is more of a do-it-for-me culture.' Home Depot retained two specialty stores — a Home Decorators Collection Store and a paint and flooring store — but stated it had no immediate plans to expand them.

The failure cost Home Depot an estimated US$150-200 million in write-downs and closure costs. The case is studied alongside Best Buy China and Walmart Germany as a textbook example of a US retailer failing to adapt its business model to a fundamentally different market.