Electricity dealers help Chinese consumers to fight inflation in full or in part

Hu Run

What else can help Chinese consumers to fight inflation in full or in part, as raw material prices are strong, labor costs are high, and money is out of date? The answer is: electricity dealers.

In recent years, China's E-commerce has shown an "alternative" business model: by cutting prices to seize the market, consumption of investors ' money, and then use the market size to obtain a new round of financing. The business itself does not make money, but as long as it can be from the VC market to the money, the game can continue.

This model has a huge impact on the traditional sales industry. Home appliance Sales giant Suning Appliance (002024, stock bar) is forced to transform, its vice chairman weimin indignation and this mode to denounce as "MLM", called "abnormal".

As a response, the upstart Jingdong Mall yesterday played a "everyone electricity three years 0 gross margin", "to ensure that more than Gome, suning chain cheaper than at least 10%," the slogan for the loss of money to make a yell contributed to another example.

How much affected by this, suning appliance stock price plummeted, one months ago completed the fixed increase price more than halved, participate in the increase of Jindong, Hong Yi Investment has been a huge loss. Gome has also been implicated and shares have plummeted.

For consumers, electric dealers are living Lei Feng. They burn PE, VC money, including overseas funds, benefiting Chinese consumers. Like Jingdong Mall, there are tiger funds, Sequoia, Kleiner and other foreign institutions, and Dangdang in the United States listed, is equal to round the U.S. dollar to China to burn. A person in the industry estimates that in 2011 the electricity quotient "subsidized" the Chinese consumer 10 billion or 20 billion yuan.

For investors, electricity dealers are the destroyer of values.

Industry laughs, for PE, the electric quotient means "Xianchan to the merchant". In order to cope with the pressure of capital, the electric business industry also appeared to fake behavior. Dangdang CEO Guoqing said that the current "traffic fraud, gross profit margin fraud and the prevalence of fraud," E-commerce sales have Shansheng by merchants, suppliers repurchase.

Capital is profit-driven. They covet the pattern of oligopoly after a stable market order. But in a few years, the pattern is not yet there, and consumers can still enjoy a price war for a while. CPI pressure is not that big.

Even if the market order is stable, the profit prospects of the electric business is not good. Amazon, the originator of global electricity, has less than 1% net profit, and most of it comes from cloud computing services, which are largely unprofitable.

Electricity dealers are not willing to be philanthropists. Because consumer conversion cost is too low, it is difficult to build brand loyalty, electricity Shangtianjan is the participant of price war. "E-commerce is a hoax," Bi Sheng, the CEO of another Chinese electric giant Amoy, said at the end of 2011.

The value of the traditional retail business was also destroyed by the electric dealer. Those with high standards and price-sensitive products are more severely damaged. Home appliances, books and other products so that the electricity dealers start price war of the general choice.

Investors in a-share market should pay attention to the extent of the impact of various industries. such as department stores, trade, clothing and other industries, have become the victims of the shock wave of the electric business. Even red wine has been affected. Recently, Zhang Yu burst "pesticide exceeded the door", the share price plummeted. But as long as the attention will find, before this, Changyu's share price trend is far weaker than the liquor class. The reason is that, after the electric business to enter red wine, Changyu and imported red wine, compared with the price ratio is not superior.

As consumers, please enjoy the "benefits" brought by the electricity dealers, as investors, please avoid the electric shock wave. (The author is the editor of this newspaper)