Media Markt to shut down all city stores on March 11

Media Markt, the consumer electronics retailer, announced Wednesday that it will pull out of China on March 11, closing all seven of its stores in Shanghai.

The Germany-based Metro Group, which holds a 75 percent stake in Media Markt China, made the decision to shut down the chain with the consent of Foxconn Technology Group, which holds the remaining 25 percent, according to a statement on the company's website.

The company is leaving China due to the "highly competitive market environment," according to the statement. It follows the exit of US-based retailer Best Buy, which left the Chinese market in 2011 due to financial losses.

Media Markt China, headquartered in Shanghai, has operated in the city since 2010. It had a workforce of 750.

It was not surprising to hear that Media Markt would leave China, said Liu Buchen, an expert from the home appliance consulting firm, Jiachunqiu Media Institute. Local retailers such as Suning and Gome offered lower prices and monopolized the market.

The downturn in the local manufacturing and retail industries might have also contributed to Media Markt's problems in China, he said.

"I estimate that Media Markt had less than 3 percent of China's retail consumer electronics market," Liu told the Global Times.

He estimated the market was worth 1.2 trillion yuan ($193 billion) to 1.5 trillion yuan last year.

The Media Markt store on Huaihai Road Middle will remain open as the chain's primary customer service center until April 30, according to the press release. After that date, Xinkean, a company based in Tianjin, will take over responsibility for servicing customers who bought extended warranties from Media Markt.

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