updated 12/26/2006 9:41:23 AM ET 2006-12-26T14:41:23

Consumer electronics retailer Best Buy is opening its first outlet in China, teaming up with a local partner to tackle the hyper-competitive market for gadgets and appliances.

Best Buy, the No. 1 U.S. consumer electronics retailer, is one of scores of foreign retailers taking advantage of a lifting of limits on foreign competition to try to woo consumers in the world’s biggest potential market.

The company joined with local electronics chain Jiangsu Five Star Appliance Co., China’s 14th biggest appliance retailer, to open the store in Shanghai’s busy Xujiahui shopping district.

In a so-called “soft opening,” the store opens its doors to regular customers Thursday. On Tuesday, it invited journalists for a preview of its 80,000 square feet outlet — the company’s biggest store anywhere and its first outside North America.

Chinese consumers are spoiled for choice, facing a bewildering array of products in almost every area. But appliance outlets are often dingy, smoke-filled malls with dusty displays crammed with substandard products. Free installation is hard to come by and the purchase of just about any product often involves one or two returns of defective items.

Best Buy says it intends to win over finicky Chinese customers with clean, pleasant outlets and helpful, dependable service.

At the Shanghai store, the atmosphere is distinctly American.

Lu Weiming, chairman and general manager of Best Buy China’s grand entrance had none of the formal dignity typical of most corporate events as he swept through an aisle giving “high fives” to cheering staffers clad in bright blue polo shirts.

“We are confident that we now have a store model that will differentiate us and win the consumer’s heart,” Lu declared.

The store’s four floors are brightly lit, with spacious, carpeted aisles and dozens of brands to choose from in most product ranges, from computer accessories and home entertainment systems to the latest kitchen equipment.

Despite intense local competition in the lower segments of the market, foreign brands dominate in malls and shopping centers aimed at the country’s fast-growing middle class, who are able and willing to pay a bit more for better service and quality.

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