Crazy price war overdraft electric business enterprise future

"200 million subsidy", "300 million Let", "400 million Let", "refresh the whole network low price", "complete breakdown of the entire network upset" ... Since entering the May, Suning easy to buy, day cat net, Jingdong Mall, Dangdang, Bowser Network, Gome Online mall, new egg nets, and other major electric dealers set off a new round of the huge price promotions, this is known as the largest market in the history of the electricity prices war.

Price war has always been a market tool for domestic electricity dealers, the previous rounds of price wars have let many electric business enterprises capital tight or even closed down, but the electricity business "lose money to make a yell" not only not convergence but intensified, the price war is from the past only in the festival play become more normal, this has to be a reflection.

According to the "2012 first quarter of China's market share of Chinese consumers," the report showed that the first quarter of this year's market share in the forefront of the cat, Jingdong Mall, Amazon, Tencent, and Suning easy to buy and Dangdang and so ahead, And the top 10 electric business enterprises in domestic market share of more than 90%, industry concentration is very high. Local manufacturers in addition to Dangdang, the other has not yet listed, these electric companies take the lead in the price war, "lose money to make a yell", is to burn money for the market, to increase the weight of the listing.

Another important reason is that in recent years, due to the impact of the Beijing-east and other electric companies, Gome's physical store sales decline significantly, which also forced the United States Su Ning to develop electricity as the focus of strategic transformation, regardless of the cost of investment, suning easy to buy, Gome, and other electric dealers have become a new round of the main

And more enterprises are passive challenge, to the price war to keep the original market share, home appliances, new Rui 500 city recently announced a high-profile price war.

If the appropriate price war is the market full competition performance, let the consumer, conducive to market development, so now the electricity business such capital-led burning money price war will drag the entire industry into the mire of price war, is not conducive to the healthy and sustainable development of the electric business sector. Specific performance in the following areas.

First of all, the price war overdraft electric business enterprise future. A dealer in charge of the enterprise in the media interview, said, "price war a dozen profits will be diluted, if not dozen, even the opportunity to lose money." "This represents the voice of many electric business enterprises." Enterprises to maintain market share and passively involved in price war, profit margins continue to be diluted, will affect the healthy operation of enterprises, to curb the enterprise in the innovation and management of investment, resulting in quality and service to reduce the cost of customer experience, the ultimate damage or the long-term development of enterprises.

According to media reports, a large number of domestic electric dealers less than 10% of the gross margin, and the U.S. Amazon's gross profit margin has remained above 20%. In order to go public, the domestic electric power market, one-sided pursuit of sales and scale, ignoring the quality of business operations, price war is the most effective means, but this is tantamount to thirst.

Second, the price war wave hinders the development of the industrial chain. The continued spread of price war will squeeze dealers and upstream manufacturers profit space, and then affect the healthy development of the industrial chain. The price of some electrical appliances promoted by a certain electric dealer has even been lower than the price of the manufacturer's shipping to a distributor, which has caused a strong rebound of dealers at all levels, and the manufacturers may still be the final buyers.

Third, the vicious price war caused the industry monopoly, not conducive to market prosperity. Price war to speed up the industry reshuffle, raising the industry threshold, to prevent the subsequent entry, eventually formed a small number of oligarchs. The result of a monopoly is that a handful of companies in the market are in charge and consumers ' interests are hard to guarantee. So there is no free lunch, consumers are now enjoying the benefits of the price war, the future may also have to taste the bitter fruit of the monopoly.

I do not deny the value of the price war on the top of the electric business enterprise's practical significance, but still need to remind that the price war can not retain customers, can not cultivate customer loyalty, but will make customers become more impetuous and picky. And because the profit margin can not be diluted forever, this determines the price war is only a phased strategy, it is impossible to play, how to form their own differentiated characteristics, how to strengthen the user experience, how to service and brand to retain customers is the real concern of the electrical business.

It is noteworthy that, although the top 10 of the electric business enterprises occupy more than 90% of the domestic market share of the market, but because the domestic electricity business is still in the early development, the market space is huge, especially in the rapid development of market segments, such as Jiuxian nets, elegant 100, Lok Amoy Network, First carved nets and other industries such as electric dealers or independent brands of the development momentum is good, so the entire electrical business market development pattern has not been finalized. For the small and medium-sized electric business, need to take the initiative to get rid of the curse of price war, through the refinement of supply chain integration to establish industry barriers, through the creation of personalized brands to establish brand barriers to win the market, I believe these enterprises will be the performance of China's electricity market new points.