Gome Is Tops in China

Knowing the value of innovation and branding helped this electronics and appliance retailer become a leader in a competitive market

In its 15 years of existence, Gome Electrical Appliances has become China's largest electronic retailer—with a 12% market share according to the company's internal estimates. The Beijing-based company started by selling TV sets, air conditioners, and refrigerators at low prices by cutting out the middlemen and purchasing directly from manufacturers. Now, Gome (despite the unconventional spelling, the name is pronounced Guo Mei and means "beautiful nation") has shifted its focus to selling Dell (DELL) laptops, Apple (AAPL) iPod nanos, and Motorola (MOT) cell phones. "Small items don't occupy too much of the store space, but the margins may be even better than the traditional electronics," says Wang Gao, a professor at Tsinghua University who runs an executive development program for Gome.

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