Mattel shuts flagship Shanghai Barbie concept store

Firms have been using Shanghai as a test market for their expansion into China

US toy manufacturer Mattel has shut its flagship Barbie concept store in Shanghai after just two years.

Mattel launched the store in March 2009 - Barbie's 50th birthday - in an attempt to expand the market for its famous doll into China.

The store was spread across six floors, replete with a staircase decorated by 875 Barbie dolls and a Barbie bar.

Mattel was hoping to offset falling sales in traditional markets hit by the financial crisis.

However sales failed to meet expectations and the firm was forced to cut its targets within the first eight months of the store's existence.

"Barbie in the US has a very long history, people grow up with the brand, their parents grow up with the brand, so brand recognition is very high. In China, though, nobody really knew what Barbie stood for," said Ben Cavender, an analyst with China Market Research.

Challenging market

International firms have been using Shanghai as a test market for their expansion into China and Mattel is not the only retailer to have had difficulty in adjusting to the Shanghai marketplace.

In February, electronics retailer Best Buy closed all of its brand name stores in Shanghai and will instead focus on its local Jiangsu Five Star Appliance group of stores.

"What it definitely says is that it is a challenging market... for foreign retailers, it is a very hard market to get correct. They either don't change quickly enough or they are not patient enough to be successful here," Mr Cavender said.

Mattel said it remained committed to developing the Barbie brand in China and would launch a new campaign across the country later this year.