Lei explained the electricity dealer burns money: As long as does not overturn wins

May 10 Morning News, 2012 Global Mobile Internet Conference (GMIC) held in Beijing this morning, millet science and technology CEO Lei in the founder of the Wang dialogue with the network, the power of crazy to burn money to explain the intention, said high investment is to achieve scale effect and then make money back, he also said, The money-burning companies can win if they don't overturn. Lei said it was easy to expand, but the real problem was the brutal competition of the internet, such as the price war. "At present, the electrical business development of the middle process, the companies are in the blood, the purpose of the blood fight through high income, access to high market share and user reputation, and then the lost money to earn back." "But this needs to be a position, lei that after the brutal competition, only 1-2 companies will be more profitable, and the current electric business peers are in this position, do fierce competition." Lei to Beijing East For example, if Jingdong in the 3C field has 70% market share, he has pricing power, this time can require manufacturers to give good enough profits. An earlier example was Amazon, the same group that began to have a very low gross profit margin, but was able to raise its gross profit margin to 20% after reaching the scale effect. For the current large-scale burning money of the electric Company, Lei advice is to control the rhythm, like driving on the highway, 130 kilometers per hour The most important thing is not to overturn, as long as not overturned can win. (Tracy)