The most formidable competition in China's electrical industry

"0 margin" of the declaration, Jingdong Mall chairman and chief executive officer Liu on Weibo on the steep rise in popularity. "The afternoon" quickly get response, Suning easy to buy, Gome Online Mall, a succession of "challenge", even Xun network also participate in, issued "Jingdong Dare and Xun compare" challenge book.

The "most formidable competition in the Chinese electrical industry" began 9 o'clock August 15, and how the "0 gross margin" of the competition weapon was spawned? How does the situation of "throwing pies at the consumer's head" happen?

In fact, the declaration of "0 gross margin" has its rationality. However, it can only occur when all factors are in order.

The first is the coincidence of timing. Su Ning needs money now. August 13, Suning issued a notice to the public to raise capital of 8 billion yuan. In the first half of 2012, Suning's net profit fell 29.49% year-on-year. On the one hand, Su ning to offset the sluggish consumption caused by the line business profit decline, on the other hand, the online business suning is still in the period of burning money. The industry circulated, due to financial constraints, Suning has begun to extend the payment cycle, and began to use commercial acceptance rather than bank acceptance.

At the same time, suning Tesco is planning to 3C commodity line under the unified price first in Beijing to implement the pilot. This for 3C goods occupy a large proportion of jingdong, how can not rise to fight back? Since it's a life-and-death battle, don't be shy. So, "Jing dong Everybody Electricity three years 0 gross margin" slogan is strong shout loudly.

Second, the strategy is established and tactical issues become important. Why is "everybody electricity" 0 gross profit? Jing Dong's core is 3C, Suning and Gome's core is everyone electricity "to hand for life", why not do? Jing Dong without everybody electricity, at least is a little one arm of Yang Guo, still in this river-Lake, Beijing East and Gome without everyone electricity, it is difficult to foothold in the lake.

At present, only Suning announced will be implemented in the national store line below the same price, and only in Beijing trial run, other household appliances chain stores do not have any similar measures. Large household electrical appliances once attracted to the online sales, home appliances chain physical stores of the bitter days came.

"0 Gross margin" attracts the net to buy the person at the same time, also be appraised as "a show" by the industry personage. As a result of the sales margin does not include the sale of manufacturers such as rebates (the industry is called the background margin), and home appliances industry profits mainly in the background margin, so the Beijing-east commitment to the big household appliances 0 gross profit, in essence, is only the difference of 0 gross profit.

Online price advantage is generally stronger than the offline entity shop, do not promote, Jingdong Mall and Gome, Suning line store prices on the difference of 10 points above. Public data show that Gome, Suning line stores under the overall gross margin of about 20%, and Jingdong Mall previously announced the full platform margin of only 5.5%. According to this calculation, to achieve "price lower than 10%" goal for Jingdong is quite easy.

At the same time, the supplier of products have differentiated, some brands of household electrical appliances manufacturers will also sign a similar "XX Model exclusive Agent" agreement, which will make "price war" becomes the name does not match. How can you be afraid of the promise of being "cheaper than you"?

Jing Dong This "the frame" chose "Everybody electricity" as the weapon of price war, why is everybody electricity? First, because everyone electricity is Su Ning and Gome's "core commodity", second, the home appliance industry has a large inventory pressure. Home appliances Industry energy-saving huimin, old for new and home appliances to the countryside after the three policy exit, the whole industry is increasingly difficult situation. In the first half of 2012, the household electrical appliances industry production of finished goods capital occupied 81.29 billion yuan, an increase of 18.7%. The entire white goods market to achieve sales of 49.82 million units, down 14% year-on-year. Household appliances industry overall sales are not good, refrigerators, washing machines, air-conditioning, color TV and gas appliances, such as sales still maintain a downward trend.

In the case of home appliance manufacturers, they hope to diversify the channel, see too Much inventory digest, on the other hand, also worry, if the E-commerce channel in order to price war and depress prices to "squeeze" suppliers, may cause irreparable damage to the entire household appliances industry. Many enterprises to the electricity dealers depressed prices are very criticism, but subject to the huge volume of shipments of channel advantage and have to "swallow". Konka Vice President Mu Gang forwarded Liu "Jing Dong three years gross margin" micro-blog and to attack, soon it will be deleted. Must have had his difficulties.

It is not the first time that the so-called "price frame" between the electric dealers has been made. But the careful Netizen discovers, August 14 evening Jing Dong has quietly to many big appliances price to increase. In the age of information underdevelopment, this can still work, but the information transparent "micro" era, this trick is pale.

Consumers want to buy cheap goods, I hope this is not a flicker. But the basic Law of the market is there. After all, no investor is willing to pay his own money to consumers. Monopoly is certainly not conducive to the increase in consumer welfare, and the vicious competition in the industry will ultimately be detrimental to all parties.

Editor: Ma Yuan Tags: everyone electricity suning Electric business consumer welfare 0 gross margin

Related reports electric dealer price war launched a phishing site has been intercepted 172 times the fierce price of electricity dealers who pay for the crazy big three prices and the lowest price war net users say "pit dad" the fierce "price war" who pay for madness? Beijing East naked hand-to-hand to suning gome

Three major electric dealers price war 15th to start electricity price war and two plate su ning emergency positive reversal trading Ma Guangyuan: The price of the battle of the electricity business model of a single