Behind the Electric War

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Previously, has been clear to oppose the price war Dangdang CEO Guoqing, this time, but took the initiative to pick up the price of the stick, looking for reverse attack.

"When the account is still 1.3 billion yuan, so do not save flowers, but should actively expand market share." Recently, Guoqing said the price war's strategic goal is "not to let opponents rest."

Guoqing's "unusual move" stems from a growing dilemma that, when it comes to the New York Stock Exchange in 2010, tends to be profitable in a balance of scale and profitability, while market share is losing money.

After the bitter experience of the guoqing may understand a truth-price war is not good, but do not play.

Jing Dong in "cultivation and interest"

This year, guoqing but the price war killer identity active in the electric business, the "6 18" electric war is typical.

Dangdang related responsible to the "Daily economic news" reporter introduced when the "June counter attack" of the battle plan-the whole month, the entire category participates in the price war, by the book, the clothing (including the tail goods sinks) Two big "sharp knife" to drive the beauty makeup, the 3C home appliances, the baby, the daily necessities and so on whole category price war, the promotion intensity in "6 18" Period to maximize.

For when the former price war fighters into the cause of today's prices war killers, the above leaders bluntly, the initiative to provoke a price war is Dangdang competition strategy, so as not to allow opponents to recuperate, while taking the opportunity to expand the strategic category.

In this respect, Guoqing has elaborated: "Before we are the challenge side, is retaliatory retaliation." From last year store celebration month and ' Double 11 ' start to attack. Why did you take the initiative? That's the strategy. Guoqing said that since the Beijing-east in 2013 proposed "self-cultivation" strategy, and did not like last year, the High-profile start price war. "We find that our competitors are financially unable to hold on to the huge losses and want to recuperate, and we don't let our opponents recuperate, so we attack." ”

However, there are many people in the industry who want to beat the "self-cultivation" in the price war.

"The current competition for the electric business platform is in a relatively deadlocked phase," said steady, an observer for the electricity business, told the Daily economic news. Each platform will now be in their main category Afterburner, ancillary category borrowing power, the use of their own disadvantage to beat others advantage, just bluff. ”

It is worth noting that in this price war, Dangdang in the 3C category, has launched a "fire", "Onslaught", "Rush" and other topics such as promotional measures, and Jingdong main category is 3 C.

Wang Liyang, a senior electric-business observer, also said it was "not very bullish" when it was trying to intercept the BoE. He told the Daily Economic news reporter that in the Battle of the electric business platform, when and Jingdong is not a level of opponents. such as 2012 years when the total revenue of 5.1938 billion yuan, and Beijing east for nearly 60 billion yuan.

Provoke a "new price war" and let it go.

"Daily Economic news" reporter survey found that "6 18" period, Dangdang performance is active behind, also due to the current situation in the industry as a result of the dilemma.

2010 after the listing, the conservative guoqing, to profit supremacy as a business philosophy, however, in the pursuit of profitability, when the market share does not rise and fall.

Reporter according to when the 2010 after the listing of the relevant earnings data, found that from 2010 to 2012, when the revenue of the annual year-on-year growth rate of 56.5%, 59% and 44% respectively. It is noteworthy that in recent years the rapid development of the electric business industry, when the growth rate is far lower than peers. According to the relevant data compiled by Beijing-east, it was found that from 2007 to 2012, the year-on-year growth rate of Beijing-east sales reached 350%, 266.67%, 203.03%, 155%, 105% and 185% respectively. In fact, the 2012 growth rate was even far below the industry average.

According to a study by Analysys International, China's business market in 2012 was up 99.2% from 2011, compared with a 2012-year year-on-year growth rate of just 44%, less than nearly half the industry average.

In the electric business industry "fast fish eat Slow fish" in the race, when the slower growth rate directly led to Dangdang market share of the decline. China's E-commerce Research Center monitoring data showed that 2012 when only accounted for 1.2% of the market share, ranked eighth, gradually marginalized. At present, the industry already exists when the voice of the acquisition of Baidu or Gome.

Wang Liyang said, when it has been to the "light feet not afraid of shoes," the situation, no longer through the price war to make some movement, the degree of marginalization will be more and more serious, so when the high-profile take out real money to participate in the price war, and even provoke a price war.

Starting from March this year, when the first and Jingdong in the book field launched a head-to-head price war. For Dangdang, the price war is regarded by the industry as the essence of a late rescue of the war.

Guoqing, who holds a large amount of cash, finally understands that the price war is not good, but the price war will gradually lose market share.

"Grab share, lift share price"

Wang Liyang that when the tail product will be its June electric business war weapon. The use of subtle consumer psychology is well suited for the current time.

Wang Liyang Further said that this time when the main thrust of the war is the tail, which itself is a flash purchase of ultra-low discount sales model. The only thing that will (indeed VIPs) on the flash-purchase will not make consumers feel that the promotion, because this is his normal sales model, and for when the tail goods will be different, fooled when the consumer is not necessarily rushing to buy goods to go, may be to see books, mother and child goods and so on, But found that when the tail product will launch a 50 percent capping promotional activities, so that consumers feel when the promotional activities are very strong, but also let the public feel when the effect of the attack.

But steady points out, "is the market share so good?" Steady believes that the current market environment for electric dealers who Rob who is difficult. "Amazon do not Rob, the market share is stable, although the quality of Ali is not guaranteed, Jing-dong and suning easy to buy speed can not be exceeded at the moment, both in the grab share." ”

In steady's view, when the goal of the initiative to fight the price war, there may be another layer of strategic considerations, that is occasion to raise the share price. "When it comes to looking at the stock price of the goods, you want to boost your share price by some hype, including before the industry refers to when tens of millions of stable members and so are they create momentum, this is a rare opportunity, but also will bring a certain deal, but to continue or to be very good operating ability, short time good no effect. ”

Previously, in 2012, the only market, its market capitalisation is 3 times times the Dangdang. Obviously, the capital market is interested in the "tail goods discount" model. And when the price war One of the weapon is the main "tail goods discount" mode "Tail goods sinks" channel.

Whether it's a price war to grab market share or raise share price, or both avid, this is a desperate battle against the fighting.

For the future breakthrough strategy, when the relevant person to the "Daily economic news" reporter introduction, when the platform will continue to transition to "go out, please come in" Development strategy category. At the same time, when will be through the large data application "precision marketing", figure hundred Cross, picture clothing synergy, fine operation, drive strategic category development. In addition, the implementation of price war strategy, such as tail goods, etc., to promote the rapid expansion of strategic categories.