Four electric dealers fight price war: Home appliances high inventory into behind the scenes

Jing-dong, Suning, Gome (micro-BO), Cat and other electric appliances in the field of home appliance price war, more is the pricing side of the appliance manufacturers of the Pour force.

"51" period, the electricity business enterprise launched the price war smoke still did not dissipate, now fighting again.

May 9, Suning easy to buy executive Vice President Li Bin revealed that Suning will officially open the platform strategy, in mid-May will have 100 brand flagship stores settled Suning easy to buy. In May 16-18th, the plan to invest 2 billion yuan special supply and 400 million yuan concessions, once again a comprehensive breakdown of the entire network price.

Prior to the day, Jingdong Mall announced that it will take out 500 million yuan for the promotion of home appliances products; May 7, the Cat Electric City announced the investment of 200 million yuan to start the promotion of the whole summer, 200 million yuan will be used to subsidize the low price war in the loss of business.

A more general view is that the price war is the home appliance business enterprises to "price Butcher" Jingdong Mall launched by the collective siege.

Paller Consulting Senior Director Luo Qingxi (Weibo) does not agree with this statement. In his view, the change in the retail industry, including the electricity business, was the most dramatic in the past 50 years.

The essence of retailing is the control of pricing power. The firm's will cannot be neglected in the back of the price war.

"The price war is for real."

Since the beginning of the year, the price war between the electric business enterprises has been counted round.

Since May, the price war has become increasingly fierce. In addition to suning easy to buy, Jingdong Mall, Day Cat Mall, Gome Online Mall in May announced the end of the 90 million Yuan promotion plan.

Luo Qingxi said that it is not clear who is the first to start the price war this year, but through its system testing found that the escalating price war is clearly not outside the speculation of the promotional smoke, "they really come to the real, if the economy is not good, the price war will be more brutal."

Low price strategy, Jingdong Mall from obscurity to do the annual sales scale of more than 20 billion yuan. Eric Consulting released the latest data show that in the autonomous type of business, Jingdong Mall accounted for 50.1% of the market share, in the first quarter of the total market contraction of the net purchase, to maintain more than 25% of the chain growth.

The model for price warfare, Luo Qingxi that, "the past Jingdong mall an appliance products only dozens of of the stock, but can play than other offline enterprises lower prices, this loss of sales model, seemingly not enough to disrupt the market pricing power, but will produce a lever, making the price of relatively high products appear unsalable, Triggering a chain reaction of prices. "

From last year until now, the price war from the electricity dealers spread to the household appliances category, from virtual to solid.

For why the big category of electrical appliances become the focus of the electric business competition, Luo Qingxi analysis that the household appliances category has a high value, consumption frequency is higher than the car and other products than the fast consumer goods and other characteristics, thus, the competition for home appliances category leading position, become a comprehensive electric business enterprise will be competing goals

Jingdong Mall, for example, in its total of more than 21 billion yuan in 2011 annual sales, Home appliances 3C and consumer electronics accounted for the proportion of its sales of more than 70%, the value of goods more than 15 billion yuan.

The goal is to pour force

In the electricity business enterprise big dozen price war behind, is each enterprise faces the set target pressure.

A briefing from the "Investment bank in Beijing-east" shows that Jingdong Mall's 2011-year sales (excluding pop platform) for 3.4 billion U.S. dollars (about 21 billion yuan), 2012 Jingdong Mall hopes to achieve annual sales of 7.48 billion U.S. dollars (about 47 billion yuan), Year-on-year growth rate of more than 100%.

Suning Tesco set the 2012 annual sales target is 30 billion yuan, the guaranteed sales target is 20 billion yuan. In 2011, Suning's annual sales were 5.9 billion yuan. According to the minimum target calculation, suning sales growth target of more than 200% year-on-year.

However, affected by the macroeconomic situation, the retail industry in 2012 faced tremendous growth pressures. The information provided by the China Chain Association shows that there has been a slow growth in domestic retailing since the fourth quarter of 2011, a situation

So far there has been no significant improvement.

As a growing industry sector, the development of electricity business is better than offline physical retailing. But in the first quarter of 2012, China's network economy reached 84.71 billion, down 2.5% from the fourth quarter of 2011, down 68.5% from a year earlier, according to the survey.

Can the price war between electric business enterprises continue to rip the consumer's purse?

"The low price will certainly attract some purchasing power, but the situation of each company is different, Su Ning and Gome belong to the early stage of development, because of the small base, high growth will continue for some time," said Ruzenwang, director of the project. and Jingdong Mall already has more than 20 billion volume, the growth will be relatively slow, at the same time, Suning, Gome Electric quotient growth, will also slice its share.

The plight of the manufacturers

Electric business enterprises in front of the fight, and a so-called "pricing power" of the long line is firmly held in the hands of manufacturers.

In fact, the affected macroeconomic environment, starting from the four quarter last year, home appliance enterprises have been seriously challenged. In the first 2 months of this year, home appliances, including black-and-white appliances, kitchen appliances, mobile phones and digital products, have fallen 13% year-on-year, according to the Chinese health statistics.

Allwin Consulting The latest data also shows that the 2012-year quarter, the domestic color TV retail size of 8.52 million units, down 18.6%; Retail sales are 29.7 billion yuan, down 24.5% per cent year-on-year.

The shipment pressure of home appliance manufacturer leads to the increase of inventory. Industry statistics show that in the case of home air-conditioning, at the beginning of this year, inventory up to 20 million units. By the end of March this year, the refrigerator market inventory/Sales ratio of 0.56, slightly lower than the previous two months, but continued to record the highest level in the same period.

The plight of home appliance manufacturers has stimulated the sales of electrical appliances in the terminal to sell goods. Luo Qingxi said, manufacturers determine the pricing power of products, from the principle, the manufacturer can not support Jingdong mall this kind of disturb its price system of the electric business enterprise, but, because of sales pressure, manufacturers inevitably need multi-channel expansion.

In addition, Luo Qingxi said, "The home appliance industry originally only wired the next part of the time, home appliances manufacturers are very easy to achieve effective inventory management, and now because of the development of electricity business, so that manufacturers face the problem of inventory flow uncertainty, the past may be 1 million of the inventory is reasonable, now may be 600,000 of the inventory of the manufacturers are dangerous.