Price war is only the lowest level of the power of the war mode

Electric dealers always can not stop, also made a lot of online shopping festivals, Taobao out of the double 11, Jing Dong out of 618, Su Ning made another 818. August 18 This year, Gome also participated in the electric business war, and announced that "price overall lower than Jingdong", but "Beijing business newspaper" reporter randomly selected 20 mainstream commodity comparison found, as of this month 18th 20 o'clock, gome online only 8 commodity prices lower than jingdong, 3 commodity prices than East Beijing, The prices of 9 items are the same, and the price difference for many goods is within 1 yuan.

So, Gome, suning These traditional appliance chain enterprises into the line, there is no strength to launch price war? Gome, Su Ning and the Beijing-East competition between the end?

Why does Gome not have the strength to provoke a price war?

In fact, not only Gome, Suning also announced the line on the same price of the same way to the Beijing-East declaration of war. Price warfare has always been an unavoidable means of competition by electric dealers. Jingdong's rise in the early days also rely on price war to let Gome, Suning unprepared, and then rely on price advantages quickly grabbed a large number of market share. But since 2011, with the sales scale and active users of the Jingdong instead of playing a price war, I think this is the performance of the mature Jing-dong.

Gome and suning These traditional appliances chain in the price war does not have the advantage of two reasons:

First of all, in any case difficult to solve the line under the right-hand-hand mutual stroke. In the early stages of development, why did Jingdong play a price war? Because as a start-up company, belonging to the "Light Company" mode, there is no offline channel, relying on online sales, which directly led to the cost of East Beijing than Gome, suning low at least 15%. August 12, the Third China National power Grid Shopping forum, Bing said, in the electricity, the cost rate of online channels than the lower 15%~20%.

Apparently under the chain of the giant's warehousing, personnel, stores, counters, promotions, channels and other types of fees are higher than the line, if the line to take the next price, and launch a price war, will lead to these high costs can not be amortized, naturally bring a decline in profits and serious losses. This is one of the reasons why it is incapable of provoking a price war.

Second, the 2014 electricity dealers are no longer 5 years ago. Once, Gome to buy Bowser network to enter the electric business with Beijing East a showdown, but finally found that this will lead to loss of profits, so shrink the power line, then in the first quarter of 2014 Gome finally realized the profit. And Su Ning is resolutely against Beijing east, has been a number of consecutive quarterly serious losses. Does Gome dare to continue to lose money? Did Mr Huang allow gome to be so aggressive in prison?

And home appliances enterprises have become very rational, they do not want their own prices are controlled by the channel, so adhere to ensure that in a variety of channels are almost the same price, especially Haier, the United States and other strong brands, which also makes the electric business platform almost no price war space. As a result, Gome does not have the ability to play a price war, but also lost the opportunity to play a price war.

Price war is only the lowest level of the power of the war mode

For the price war, Liu in the Beijing-East 2014 second quarter earnings conference call, said that the development of China's electricity business today, for consumers, simple price war is not as effective as five years ago and attract people's attention. "Jingdong in product quality, product richness, services and prices are competitive, so competitors to launch a single price war on our influence has been very small." ”

The use of price wars as internet companies to challenge traditional chain giants was a very effective 5 years ago. And after 5 years of development, Jingdong sales and volume has surpassed Gome, Suning, become the leader of the industry. Its second-quarter deal amounted to 63 billion yuan, with net revenue of 28.6 billion, while Gome's total revenue in the first quarter of 2014 was only 13.351 billion.

BEIJING-East not only revenue beyond the Gome Su Ning, but also from a "light Company" into a 62000-person "heavy Company", improve the warehousing, logistics, distribution and a series of traditional enterprises will do the investment layout, from "Light" to "heavy" means that Jingdong can better provide services for consumers, but also more capable of fighting price war.

According to Liu's "Sugarcane theory", enterprises involved in the whole industry chain more links will be able to obtain more links in the profit, Jingdong in addition to the shop outside the line, almost involved in the industrial chain of various links, or even gome, suning are rich, coupled with the number of online users, brand awareness, Jing Dong micro-letter shopping, BEIJING East Mobile phone QQ shopping and other advantages, this situation is really no need to hit the price war.

Internet companies will destroy everything from "light" to "heavy"

From the above analysis, you can see the United States provoked a price war more just gimmick, and no actual action, there is no real value. And I think, facing Jingdong, Gome has completely missed the opportunity to compete with it, because no matter in the logistics, warehousing, distribution and other infrastructure construction, or the technical accumulation related to the electrical business, Gome has no layout and input, still playing "over gas" price war, which amply proves that Gome does not know the electricity quotient, There is no qualification for competition at all.

Any traditional commercial online has a corresponding mode, Jing-dong to become the line of Gome, Suning is very reasonable explanation, but Gome, suning in turn want to become Jingdong is a complete strategic error. Internet companies in the subversion of traditional industries, relying on the "light Mode", as well as the resulting high efficiency, price knife and so on. But a protracted war will depend on sound infrastructure construction.

Jing Dong used years of crazy investment, not afraid of losses to build a more than Gome, Suning is more powerful for the development of the infrastructure infrastructure (97 large warehouses nationwide, the total area of about 1.8 million square meters, and has 1808 distribution stations and 715 from the lifting point and from the Ark), the construction of a huge ecosystem. And this time the volume of Jingdong is no longer so "light", but still has the efficiency of the Internet companies, and wireless shop in the hands of the problem, it also makes the east to become difficult to be awakened by the traditional giants destroyed.

This gives us the inspiration that the internet subversion of the traditional industry is not scary at the beginning, because the Internet company does not have the full wings, the giant as long as the rapid awakening and fight, can completely destroy it in the cradle, but once the internet company from "Light Company" into "heavy Company", under the enormous power of the Internet, Its acceleration and inertia are like bombs that can destroy everything.

Look at the growth rate of jingdong and the growth rate of gome and suning can clearly prove this point. Gome 2014 First quarter results show that the gome listed companies to achieve the total channel sales revenue of 13.351 billion yuan, up 8.2% year-on-year. Beijing East 2014 second quarter earnings, the total transaction reached 63 billion yuan, the year-on-year growth of 107%, net income of 28.6 billion yuan, an increase of 64%.

So Gome, Suning now want to kill Jingdong through the model of Jingdong has no chance, can only rely on other ways of way. As we all agree, "kill Google is not another Google, but Facebook," perhaps in the o2o to seek breakthroughs, and speed up warehousing, logistics, distribution construction, improve service levels, capital turnover, reduce inventory turnover and operating rates, or to the line of the shop burden into advantage , looks like the loss of Su Ning is doing similar work.