The price competition, which sparked widespread public concern, has intensified

Su Ning just sacrificed "line to the same price", Beijing East said "three years 0 gross margin", fight flavor is self-evident. In the August, the price competition of domestic electric business enterprises, which aroused widespread public concern, has been getting worse.

Why is it difficult to avoid the price war of Chinese electricity dealers

The price war in the electricity business, if Jingdong and when the war of books is not the first battle, also quickly is the most representative. Why does the electric trader not compete in the quality of the product, but in the price?

Should say, the electrical business industry after so many years of development, has been a relatively mature business model, playing is the supply chain and value chain subdivision of the idea, wool out of sheep, manufacturers, logistics, electrical business, the source of profit has always been consumers, there is word-of-mouth sales have a profit. Then the electrical business reputation from where, or rely on the price of goods. Moreover, from the current competition pattern of the market industry, the majority of the price war is for the integrated shopping malls, these shopping sites with a high degree of similarity and service level differences are not large, can be understood as a higher degree of homogeneity; In addition, China's Internet users to choose a larger range, and the group generally prefer low-priced goods; In particular, the highly standardized 3C home appliances products, conducive to parity.

The nature of the price war is not simply to reduce prices, nor simply let consumers profit. There are three essential purposes of the current price war: To promote the market position of the enterprise, to maintain the market share of the enterprise, to improve the enterprise transaction scale and to maintain the corporate image from the angle of industry competition. This also causes the price war the pure price factor to reduce, but the propaganda role strengthens. Consumers ' online shopping potential and habits will be strengthened, and the online shopping market will be promoted.

The price war in the era of "The Golden Lord": the capital strength behind the competition

This round of household electrical appliances 3C products as the core of the price war, from the number of participants to investment and the momentum of the past, and even caused the industry on the "price war" will affect the development prospects of China's consumer electronics industry doubt. We should see that, while the price war has led to unprofitable and even loss, it has not prevented several large electric dealers from continuing their low prices because they have a deep pockets of investors or parent companies behind them. In the field of electronic commerce to play a price war "golden Master", to the e-commerce industry has caused a great impact, accelerated the advent of the industry shuffle. After the noise, this round of price war is no longer the previous single appliance dealers burn money to promote the figure, but their backs of the "golden Master."

Third, the Jing-dong Decisive Liang Jian: Liu Clever capital operation as a winner

1. "Bundled" VC into the battlefield

Electric business decade, Jingdong Mall is the largest alternative to the Beijing-East as a representative of a class of electric dealers, to create the Chinese E-commerce "alternative" business model, that is, the main business is not to make money, from the VC market to attract investors, brutal growth rate, not profit by the capital-driven model to make With the rapid rise of the "price war", Jing Dong is now facing various attack. Encirclement and suppression is not a bad thing, it is not the Beijing-East threat to others, that is, Jing dong good enough to become everyone's goal.

A lot of people preach Jingdong capital chain break, this is somewhat unrealistic. Jingdong has tied too many VCs, Russia DST, Tiger fund, Baidu Robin Li and so on, moreover, the Beijing-East has made enough social influence, the amount of financing can be said to be an unprecedented in the field of domestic electricity. Jingdong Capital chain will not appear too big problem, its market share has been big, has slowly begun to do brand, scale and services.

Beijing East's focus has jumped from the price war, now the so-called investment of 500 million yuan forced to join the price war, should only be a momentum, financing almost all into the logistics and technology research and development. The core business logic of Jingdong is not just low price, but the lowest cost. Through logistics investment, information system investment, and continuously reduce costs, maintain low-cost advantage. Thus keeping the net profit unchanged in the case of low price.

2. Liu's goal: listing refinancing to build China's Amazon

With the Beijing-East sales scale of about 30 billion, the channel's right to speak and bargaining power is being strengthened, the strong position of the Beijing-east supplier will be gradually highlighted. BEIJING-East next plan is to go public to seize the opportunity. The current industry situation, the company except Jingdong, no one really has a long-term investment in business value. The IPO plan was forced to run aground because of its low gross margin estimates of 6 billion dollars below the C-round financing of 10 billion. Beijing East seems to have started preparing for a D-round financing if the IPO failed in September.

The biggest challenge facing the future of Jingdong lies not in the breakage of the capital chain, but in how to build a low differentiated business model to establish the core competence and construct the trade barriers after the market grab the leading position in the enterprise. In any case, Jing-dong has created the most peculiar phenomenon of the electric business Development Decade: It is only one step away from the most successful business enterprise, and Beijing East will be the biggest miracle in China's electricity business.

Iv. Capital Market Beijing East has taken the initiative

In fact, in the price war behind, is the electric business enterprise procurement, reserve, supply chain, IT support system, logistics distribution, payment and other comprehensive strength of the comprehensive contest. With the maturity of the online shopping model, the price war will gradually change to the "value war", from commodity price, commodity quality, logistics Express, after-sale service and so on to enhance the user experience, enlarge the market share. 2012 may be the year of industry shuffling. The shuffle of the outcome is not predictable, but can be sure that only by price war is not the last laugh. Beijing East in the fight for the price of War One is to expand sales channels, the second is in the capital market, the ultimate goal is to win in the capital market; in Jingdong and Suning price station, Suning and Gome's share price has plunged 30%, The Beijing-east through private equity financing, for the listing has laid a solid foundation; Beijing-East before the listing by playing price war quickly improve visibility and influence, the future listing after the price of natural prices higher, easy to be sought after by investors; So, seemingly a price war, is actually a capital war, Liu and his shareholders are getting a higher return on the capital markets, Liu is already a winner.