Ordinary Gweilo

Blockbuster is giving up on Hong Kong because (they say) shop rentals are too high. As the leases on their existing shops run out over the next 18 months, they will close down. Blockbuster came to Hong Kong after the KPS chain went bust, and took over many of the locations and most of the stock. However, I don’t think it has worked out quite the way they expected, and they have not expanded in Hong Kong or started up in China. In fact, over the last couple of years the shops have become increasingly tatty and it didn’t look as if they were doing very well. They recently starting selling second-hand DVDs purchased from their customers, which looked like a rather desperate ploy.

The days, DVDs are cheap enough to buy, so why bother renting? Smaller shops with lower overheads can sell and rent VCDs and DVDs more cheaply than Blockbuster, and at the top end HMV has a better selection and more space. Or there’s always the Internet, with CD Wow, Amazon, etc.

Shop rentals in Hong Kong are comparatively high, but companies with the right business model seem to survive.

[Just noticed that BWG has posted something similar with an identical headline. He’s not normally that topical!]